The figure below shows the PPFs for two countries: Israel and Egypt describing t

Question

The figure below shows the PPFs for two countries: Israel and Egypt describing their production possibilities for cotton and oranges. The PPFs in the figure have a constant slope. This means that:

A - As the countries produce more cotton they will have to give up more and more oranges

B- The opportunity cost of producing cotton is decreasing and the opportunity cost of producing oranges is increasing

C - The slope of the PPFs is ambiguous.

If we increase the production of oranges we have to also increase the production of cotton

Explanation / Answer

B- The opportunity cost of producing cotton is decreasing and the opportunity cost of producing oranges is increasing

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