Opportunity Cost on PPC Increases with Steeper Slope

Steps:

• Recall that opportunity cost of good X is the units of Y forgone per unit of X, measured by the absolute slope of the PPC.
• Identify the slope at each point: it steepens along a bowed-out PPC as more X is produced.
• Compare slopes: the greatest |ΔY/ΔX| indicates highest cost.
• Select point C, where the curve is steepest.

Why C is correct:

• At C, the PPC slope is steepest, maximizing Y forgone per X unit, per the law of increasing opportunity cost.

Why the others are wrong:

• A: Slope is flattest, minimizing opportunity cost of X.
• B: Moderate slope, lower cost than C.
• D: Slope less steep than C, reducing Y forgone per X.

Final answer: C