Production Possibility Boundary

Production Possibilities

Marginal Cost of One More Bushel Clams in Liters Milk

The Cost of One More Bu. Of Clams

Marginal Cost of One More Liter Milk in Bu. Clams

The Cost of One More Liter of Milk in Bu. Of Clams

Benefit of One More Bushel of Clams in Liters of Milk

Liters of Milk Willing to Give up for One More Bushel Clams

Cost and Benefit of Consuming More Clams

Efficient Quantities of Clams and Milk to Produce 2 Bushels of Clams and 15 Liters of Milk because at this point –The Guru must give up 3.2 liters of milk to gain one more bushel of clams at this level of production –The Guru is willing to give up 3.2 liters of milk to gain one more bushel of clams –Produce more clams: the cost is greater than the benefit –Produce fewer clams: the benefit is greater than the cost