Look at the table below which shows the production possibilities for two products, pens and pencils.

a. Calculate the opportunity cost of producing 1 additional pen between points A and B.

b. Calculate the opportunity cost of producing 1 additional pencil between points A and B.

c. Calculate the opportunity cost of producing 1 additional pen between points B and C. What conclusions can you come to about this opportunity cost compared to the calculation you made in a. above?

d. Calculate the opportunity cost of producing 1 additional pencil between points B and C. What conclusions can you come to about this opportunity cost compared to the calculation you made in b. above?

Transcribed Image Text:

Point Pens Pencils ABC 10 0 5 10 2 25