If a Country Produces Good Y (Measured on the Vertical

question 30

Multiple Choice

If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis) , then the absolute value of the slope of its production possibility frontier is equal to

• A) the opportunity cost of good X.
• B) the price of good X divided by the price of good Y
• C) the price of good X divided by the price of good Y.
• D) the opportunity cost of good Y.
• E) the cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.

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Definitions:

Output

The total amount of goods or services produced by a person, machine, business, country, etc., during a given period.

Economic Profit

The net gain or loss after removing both easily identifiable and not readily apparent expenses from the overall turnover.

Price

The amount of money or compensation given in exchange for goods or services in a market.

Diagram

A simplified representation or drawing that illustrates relationships or processes, often used in economics to demonstrate concepts or data visually.