Question

Calculate the marginal opportunity cost (MOC) of commodity X for the given combinations:

Commodity X	0	1	2	3	4	5
Commodity Y	100	95	85	70	50	25

Answer 1

\[ \text{MOC}=\frac{\text{Loss of Commodity Y}}{\text{Gain of Commodity X}} \]

Commodity X (Units)	Commodity Y (Units)	MOC of X (Units of Y)
0	100	–
1	95	5
2	85	10
3	70	15
4	50	20
5	25	25

As the production of Commodity X increases by one unit, the quantity of Commodity Y sacrificed increases from 5 to 25 units. Thus, MOC is increasing, indicating that the Production Possibility Curve (PPC) is concave to the origin.

Marginal Opportunity Cost (MOC) refers to the quantity of one commodity sacrificed to produce an additional unit of another commodity.