The following diagram shows the production possibilities boundary for Arcticland, a country that produces only two goods,

Question:

The following diagram shows the production possibilities boundary for Arcticland, a country that produces only two goods, ice and fish. Labour is the only factor of production. Recall that a linear production possibilities boundary reflects constant opportunity costs for both products.

a. Beginning at any point on Arcticland's production possibilities boundary, what is the opportunity cost of producing 10 more tonnes of fish?
b. Beginning at any point on Arcticland's production possibilities boundary, what is the opportunity cost of producing 100 more tonnes of ice?

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...