Giving reason, comment on the shape of production possibility frontier based on the following schedule. Also, find the marginal opportunity cost of producing Good-A.
Good - A (units) 0 1 2 3 4 5
Good - B (units) 65 52 39 26 13 0

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Solution

The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. Therefore, if marginal opportunity cost remains constant as in the above case i.e. 13 then production possibility curve will be a straight line owing to constant slope.
Good-A (Units) Good-B (Units) Marginal Opportunity Cost
0 65 $-$
1 52 $\frac{13}{1} = 13$
2 39 $\frac{13}{1} = 13$
3 26 $\frac{13}{1} = 13$
4 13 $\frac{13}{1} = 13$
5 0 $\frac{13}{1} = 13$
The above schedule shows that the marginal opportunity cost of producing more of Goods-A in place of Good-B is constant $= 13 .$ Accordingly , production possibility frontier should be a downward sloping straight line.

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Giving reason comment on the shape of production possibilities curve based on the following schedule:

$\begin{matrix} Goods-X & 0 & 1 & 2 & 3 & 4 Units Goods-Y & 8 & 6 & 4 & 2 & 0 Units \end{matrix}$

Good-X (Units)	$0$	$1$	$2$	$3$	$4$
Good-Y (Units)	$20$	$18$	$14$	$8$	$0$

Good-X (Units)	$0$	$1$	$2$	$3$	$4$
Good-Y (Units)	$4$	$3$	$2$	$1$	$0$

Good-X (Units)	$0$	$1$	$2$	$3$	$4$
Good-Y (Units)	$8$	$6$	$4$	$2$	$0$

Watches (Millions)	$0$	$1$	$2$	$3$	$4$	$5$
Shoes (Thousands)	$90, 000$	$80, 000$	$68, 000$	$52, 000$	$34, 000$	$10, 000$

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