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18 September, 2021

67. Slope and Cost

 Opportunity cost is measured by the slope of the production possibilities curve. In particular, the slope of the production possibilities curve is the opportunity cost of the good measured on the horizontal axis, which in this example is storage sheds. This production possibilities curve presents opportunity cost values for segments between each pair of points. The opportunity cost of producing the first shed, moving from point A to point B is the schedule is 5 dozen crab puffs (or -5). The slope of the production possibilities curve between points A and B is also -5.