Consider the production possibilities frontier in the figure shown. As more and more cars are produced the opportunity cost of producing more cars:

Question

Quizplus · Accepted Answer

As we move along the production possibilities frontier, we have to give up increasing amounts of other goods (in this case, TVs) in order to produce more cars. This increasing opportunity cost shows that resources are not perfectly adaptable to producing both goods. Therefore, the opportunity cost of producing more cars increases as we produce more cars, making option C the correct answer.

Consider the Production Possibilities Frontier in the Figure Shown