How does the production possibilities frontier illustrate opportunity cost?
What will be an ideal response?
The negative slope of the production possibility curve illustrates the concept of opportunity cost. Moving along the production possibility frontier, producing additional units of a good requires that the output of another good must fall. This sacrifice is the opportunity cost of producing more of the first good.
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The gross domestic product of a small country is $4,150,000 and the size of its employed labor force is 5,000. The income per worker of the country is ________
A) $620 B) $213 C) $830 D) $445
Refer to the above figure. If the farmer is growing 8,000 bushels of beans and 8,000 bushels of wheat, then we know that
A) the farmer is not using resources efficiently. B) the farmer is using more land for wheat than for beans. C) the farmer should increase the amount of wheat grown and reduce the amount of beans. D) the farmer cannot be using the amount of land that was used to construct the curve.