Calculate MOC of cloth in terms of sugar at different production possibilities from the following hypothetical data of a country - Economics - Introduction

Question

Calculate MOC of cloth in terms of sugar at different production
possibilities from the following hypothetical data of a country
:
Production possibilities : A , B, C, D, E, F
Cloth (million mt ) : 0, 1, 2, 3, 4, 5
Sugar (million kg) : 50, 45, 40, 35, 25, 20

Shvetika S. · Accepted Answer

Marginal Opportunity Cost (MOC) refers to the rate at which the output of one good is sacrificed for every additional unit of output of the other good.

$M \arg i n a l O p p o r t u n i t y C o s t = \frac{C h a n g e i n U n i t s o f G o o d Y}{C h a n g e i n U n i t s o f G o o d X} = \frac{Δ Y}{Δ X}$

Here, in the given question, the MOC of cloth in terms of sugar refers to the rate at which the output of sugar is sacrificed to produce an additional unit of cloth.

Production Possibilities	Cloth (million mt.)	Sugar (million kg)
A	0	50
B	1	45
C	2	40
D	3	35
E	4	25
F	5	20

$M \arg i n a l O p p o r t u n i t y C o s t = \frac{C h a n g e i n O u t p u t o f S u g a r}{C h a n g e i n O u t p u t o f C l o t h} = \frac{50 - 45}{1 - 0} = 5$
Thus, to produce additional one million mt. of cloth, 5 million kg of sugar production has to be sacrificed, so the MOC of cloth in terms of sugar is 5.

Calculate MOC of cloth in terms of sugar at different production possibilities from the following hypothetical data of a country : Production possibilities : A , B, C, D, E, F Cloth (million mt ) : 0, 1, 2, 3, 4, 5 Sugar (million kg) : 50, 45, 40, 35, 25, 20

Calculate MOC of cloth in terms of sugar at different production possibilities from the following hypothetical data of a country :

Production possibilities : A , B, C, D, E, F

Cloth (million mt ) : 0, 1, 2, 3, 4, 5

Sugar (million kg) : 50, 45, 40, 35, 25, 20