This preview shows page 1. Sign up to view the full content.
Unformatted text preview: roadster. What if the production possibilities frontier changes to: Roadsters = -2*SUVs + 800 ? What is the opportunity cost of an SUV? 2 roadster |(change in roadsters / change in SUV)| What is the opportunity cost of a roadster? ½ SUVs |(change in SUV / change in roadsters)| The good on the x axis is the slope so the op cost of the good on the y axis is the reciprocal. Opportunity cost of a cell phone: the op cost of a cell phone = the decrease in quantity of DVDs / the increase in # cell phones along PPF. The op cost increases as more of the other good is produced in a curved line PPF Curved line implies some workers are good at making one product & bad at making another....
View Full Document
This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.
- Spring '07