Figure 113 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter

Economics Apr 25, 2021

Figure 113 shows Mendork's production possibility curve for the only two goods that it produces-guns and butter.

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Refer to Figure 1.13 to answer this question. What is the opportunity cost of one more tonne of butter aC') output changes from point b to a?
Select one A. 4 guns. B. 6 guns. _ C.10 guns. fl D. 2 guns.

Expert Solution

Computation of Opportunity Cost of one more tonne of butter as output changes from point b to a:

Opportunity Cost = Sacrificing/Gaining

Here,

At point a, Butter = 7, Guns = 6

At point b, Butter = 6, Guns = 10

The opportunity cost of one more tonne of butter as output change from b to a = (10-6)/(6-7) = -4 guns

He needs to sacrifice 4 guns for 1 tonne of butter.

So, the correct option is A "4 Guns".

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