Along a production possibilities curve that is concave to the origin,the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.

Question

Quizplus · Accepted Answer

Concavity of the production possibilities curve implies diminishing returns, which means that as more and more resources are allocated to the production of one good, the opportunity cost of producing an additional unit of that good increases. Therefore, as we move down the curve, the opportunity cost of producing the good on the horizontal axis increases.

Along a Production Possibilities Curve That Is Concave to the Origin,the