The tables show the combinations of Good X and Good Y that two economies, P and Q, can produce when their resources are fully utilised:
Economy P
| Good X (units) | 0 | 1 | 2 | 3 |
| Good Y (units) | 9 | 6 | 3 | 0 |
Economy Q
| Good X (units) | 0 | 1 | 2 | 3 |
| Good Y (units) | 9 | 8 | 5 | 0 |
Which of the following is correct about the opportunity cost of each extra unit of X?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → It stays the same, at 3 units of Y, in P but rises in Q.
The opportunity cost of each extra unit of X is the Y given up for it.
Economy P: Y falls 9 → 6 → 3 → 0.
Y given up for each unit of X = 3, 3, 3. The cost stays the same.
Economy Q: Y falls 9 → 8 → 5 → 0.
Y given up for each unit of X = 1, 3, 5. The cost rises.
NCERT (2026-27): “Production Possibility Frontier … If more of the scarce resources are used in the production of corn, less resources are available for the production of cotton and vice versa. Therefore, if we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone. This is known as the opportunity cost of an additional unit of the goods.” |