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Question

Define Marginal Opportunity Cost. Explain the concept with a hypothetical numerical example

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Solution

Marginal Opportunity Cost (MOC) of a given commodity along a PPC is defined as the amount of sacrifice of a commodity so as to gain one additional unit of the other commodity. MOC can also be termed as Marginal Rate of Transformation i.e. the ratio of number of units of a Good sacrificed to produce an additional unit of the other good. Schedule.


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