If production of good X rises by 1 unit and that of good Y falls from 15 to 12 5 - Economics - Introduction

Question

If production of good X rises by 1 unit and that of good Y falls
from 15 to 12 5 units then, marginal opportunity cost of X is: (a)
27 5 (b) 2 5 (c) 15 (d) 12 5

Shruti Mishra · Accepted Answer

Dear Student,
The slope of production possibility curve is marginal opportunity
cost which refers to the additional sacrifice that a firm makes
when they shift resources and technology from production of one
commodity to the other The formula to calculate marginal
opportunity cost is sacrifice/gains
Therefore, the marginal opportunity cost is 2 5/1 = 2 5
Hence, correct answer is Option (b)

Regards

If production of good X rises by 1 unit and that of good Y falls from 15 to 12.5 units then, marginal opportunity cost of X is: (a) 27.5 (b) 2.5 (c) 15 (d) 12.5