Use the Following to Answer Questions

question 221

Multiple Choice

Use the following to answer questions:
Figure: Sofas and Windows
-How is slope, measured as rise over run, related to the production possibilities frontier?

• A) Slope measures the fixed costs of producing Good X and Good Y. For a slope of -3, the fixed cost of producing either Good X or Good Y is $3 multiplied by the number of units produced.
• B) Slope gives the opportunity cost of producing an additional unit of the good on the x-axis. So, if the slope is -3, the country must give up producing one-third of a unit of Good Y for every additional unit of Good X it produces.
• C) Slope gives the fixed cost of producing an additional unit of the good on the x-axis. So, if the slope is -3, the country must give up producing one-third of a unit of Good Y for every additional unit of Good X it produces.
• D) Slope gives the opportunity cost of producing an additional unit of the good on the x-axis. So, if the slope is -3, the country must give up producing 3 units of Good Y for every additional unit of Good X it produces.

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Definitions:

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