What is the opportunity cost of changing production from point B to point A?
Understand the Problem
The question asks about opportunity cost in the context of a production possibility curve (PPC). Specifically, it asks for the opportunity cost of changing production from point B to point A on the PPC, which requires understanding how much of one good (tractors) must be given up to produce more of another good (shoes) when moving between those two production points.
Answer
10 tractors
The opportunity cost of changing production from point B to point A is 10 tractors.
Answer for screen readers
The opportunity cost of changing production from point B to point A is 10 tractors.
More Information
The Production Possibility Curve (PPC) shows the maximum amount that can be produced with a set amount of resources. Opportunity cost is what is given up when you take resources from one product to produce another.
Tips
A common mistake is to confuse the axes when calculating opportunity cost. Always double-check which good is being given up and which is being gained.
Sources
- Opportunity cost & the production possibilities curve (PPC) (article) - khanacademy.org
- Complete Guide to the Production Possibilities Curve - ReviewEcon ... - reviewecon.com
- Production Possibility Frontier (PPF): Purpose and Use in Economics - investopedia.com
AI-generated content may contain errors. Please verify critical information
