Multiple Choice Question:
Output of Good-X decreases by $500$ units and output of Good - Y increases by $500$ units, when some resources are shifted from the production of X to the production of Y. The marginal opportunity cost is __________.

0.2

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0.75

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0.8

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1.0

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Solution

The correct option is B $1.0$
Output of Good-X decreases by 500 units and output of Good-Y increases by 500 units, when some resources are shifted from the production of X to the production of Y. The marginal opportunity cost is 1.0. The slope of the production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from the production of one commodity to the other. The formula to calculate marginal opportunity cost is sacrifice/gains. Therefore, the marginal opportunity cost is 500/500= 1.
Hence, option D is correct.

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Multiple Choice Question:Output of Good-X decreases by 500 units and output of Good - Y increases by 500 units, when some resources are shifted from the production of X to the production of Y. The marginal opportunity cost is __________.

Multiple Choice Question:
Output of Good-X decreases by $500$ units and output of Good - Y increases by $500$ units, when some resources are shifted from the production of X to the production of Y. The marginal opportunity cost is __________.