Question

Define Marginal Opportunity Cost. How does it determine the shape of production possibility curve?

Answer 1

Answer:

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. Therefore, if marginal opportunity cost remains constant as in the above case i.e. 13 then production possibility curve will be a straight line owing to constant slope.

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Answer 2

Answer:

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.

Explanation:

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