Looking at the production possibilities curve below, what is the marginal opportunity cost of producing the second unit of clothing? 1)    The production possibilities curve below show the hypothetical relationship between the production of food and clothing in an economy. Combination Food Clothing A   0   4 B   7   3 C   13   2 D   18   1 E   22   0  

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There are three key concepts to understand when solving this question:

1. The Production Possibilities Curve (ppc) shows all the combinations of goods you can feasibly produce. This means it shows maximized combinations (and maximization of utility is what we want in economics) and therefore is a constraint.

2. Given a constraint, Opportunity Cost represents what you must give up of a good to get more of another. Since you are operating on the maximized ppc, you cannot make more of one good without giving up some of the other, or else you would violate the constraint.

3. Marginal Cost means you are operating on the margin of production, so it represents the change in cost between one more or one less of a good.

In this problem, we want to solve for the marginal opportunity cost of going to production of the second...

(The entire section contains 2 answers and 447 words.)

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