In a Production Possibilities Frontier Graph, the Cost of Producing

question 11

Multiple Choice

In a production possibilities frontier graph, the cost of producing more units of a good is measured by the

• A)dollar value of the additional output.
• B)area in the arc between the PPF and a straight line drawn between the starting point and the ending point.
• C)dollar value of the resources used to produce the good.
• D)amount of the other good or service that must be forgone.
• E)None of the above answers is correct.

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Definitions:

Opportunity Cost

The value of the best alternative forgone as a result of choosing a particular action or decision.

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