Use this link to access approaite figure: http://www.youtube.com/watch?v=Bu12MpY

Question

Use this link to access approaite figure: http://www.youtube.com/watch?v=Bu12MpYkgLg

This a multiple choice question, pick one answer (A-E)

Please explain why you pick an answer

25.

Consider the PPC in the figure above, which describes a firm that can produce both good X and good Y. Which of the following is true?

A)

The opportunity cost of the first unit of good X is 1 unit of good Y.

B)

The opportunity cost of the ninth unit of good X is 9 units of good Y.

C)

The opportunity cost of the first unit of good X is 2 units of good Y.

D)

The opportunity cost of one unit of good X is 10 units of good Y.

E)

The opportunity cost of the tenth unit of good X cannot be determined from the information given.

25.

Consider the PPC in the figure above, which describes a firm that can produce both good X and good Y. Which of the following is true?

A)

The opportunity cost of the first unit of good X is 1 unit of good Y.

B)

The opportunity cost of the ninth unit of good X is 9 units of good Y.

C)

The opportunity cost of the first unit of good X is 2 units of good Y.

D)

The opportunity cost of one unit of good X is 10 units of good Y.

E)

The opportunity cost of the tenth unit of good X cannot be determined from the information given.

Explanation / Answer

a) The opportunity cost of the first unit of good X is 1 unit of good Y. opportunity cost is what you give up in order to do something else in this case going from 0 to 1 x means you go from 10 to 9 y so cost of 1 x of is 1 y The rest are wrong because they give a different numbers for opportunity cost

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