Question

Based on the production possibilities curve for books and pencils shown, what is the opportunity cost of producing a book?

How to find

Answer 1

Opportunity cost of a book = how many pencils you must give up to produce one more book.

How to find it on the PPF:
1. Read the coordinates of two points on the curve (A and B) that differ by the number of books you want to consider.
2. Compute the change in pencils (ΔP = PencilsA − PencilsB) and the change in books (ΔB = BooksB − BooksA).
3. Opportunity cost of one book = ΔP / ΔB (units: pencils per book). Take the absolute value — it’s how many pencils are forgone.

Notes:
- If the PPF is linear, this ratio is constant everywhere; pick any two points.
- If the PPF is bowed out (concave), the opportunity cost depends on the point (it increases as you produce more books); use the two nearby points to find the local cost or use the slope at that point.

Quick example:
- Point A: 0 books, 100 pencils. Point B: 1 book, 80 pencils.
- ΔP = 100 − 80 = 20 pencils; ΔB = 1 − 0 = 1 book.
- OC of one book = 20 pencils per book.

If you can tell me the coordinates or show the graph, I can compute the exact opportunity cost for the book from that specific PPF.