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If the nation wishes to produce more cheese, then because labor resources are scarce and fully employed, it is necessary to move labor out of wine production in order to increase cheese production. The loss in wine production necessary to produce more cheese represents the opportunity cost to the economy...
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The slope of the PPF, -( aLC / aLW ), corresponds to the opportunity cost of production in the economy.
To see this more clearly consider points A and B on the adjoining PPF diagram. Let the horizontal distance between A and B be one pound of cheese. Label the vertical distance X. The distance X then represents the quantity of wine that must be given up to produce one additional pound of cheese when moving from point A to B...
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