DIRECTIONS:
MOVING FROM THE PRODUCTION OF
GOOD Y TO THE PRODUCTION OF GOOD X
Using your cursor, draw a line from Point B to the y axis
and then to the x axis. Notice to produce 6 units of
Good X, you have to give up the production of 20 units of
Good Y. This means the opportunity cost of producing 6
units of Good X is 20 units of Good Y.
Continue doing the similar drawing of lines for
Point C, then Point D, then Point E, and then Point F,
EXPLANING the opportunity cost of each decision for
producing more of Good X.
ADVANCED: Explain why this is considered to be
INCREASING COSTS.
MOVING FROM THE PRODUCTION OF
GOOD X TO THE PRODUCTION OF GOOD Y
Using your cursor, draw a line from Point E to the y axis
and then to the x axis. Notice to produce 20 units of
Good Y, you have to give up the production of 0.4 units of
Good X. This means the opportunity cost of producing 20
units of Good Y is 0.4 units of Good X.
Continue doing the similar drawing of lines for
Point D, then Point C, then Point B, and then Point A,
EXPLAINING the opportunity cost of each decision for
producing more of Good X.
ADVANCED: Explain why this is considered to be
INCREASING COSTS.