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

Correct answer (D),

Explanation :- constant slope PPF says that sacrificed item and gain received by adding another item is same. constant slope for example says that if one unit of cotton is sacrificed then only one unit of orange can be gained.

Other options are not supported by the graph given in the question.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.