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Title: oppurtunity cost

Essay Details

Subject: Business
Date: August 7, 2009
Length: 2 / 501
No of views: 0
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A movement from Point A to Point B by Zedland would mean a sacrifice of 50 cars to gain an extra 50 units of food. The opportunity cost is known as marginal rate of substitution and in our example it is constant. This is why the production possibility frontier curve is a straight line denoted by a constant slope or constant MRS...

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This is why the production possibility frontier curve is a straight line denoted by a constant slope or constant MRS. The Production may increase due to the movement of the frontier outwards dur to the following reasons: · More resources are discovered which would increase the production potential of the economy; · There is an increase on the productivity of the existing resource use; or · There is an improvement in the level of technological progress...

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