In using a guns and butter production possibilities curve with increasing opportunity cost,producing more and more tanks
A)Lowers the cost of each individual tank.
B)Can be done at a constant opportunity cost.
C)Requires us to give up larger and larger amounts of butter per tank produced.
D)Is not possible due to scarcity.

Question

Quizplus · Accepted Answer

The increasing opportunity cost means that as we produce more tanks, we have to give up larger and larger amounts of butter. This implies that the resources used for producing tanks are better suited for producing butter and as we use more and more of these resources for tank production, the opportunity cost of producing an additional unit of tanks increases. This results in a curved PPF with increasing opportunity cost. The cost of producing each individual tank does not decrease as we produce more, and it is not possible to produce an infinite number of tanks due to scarcity. Therefore, options A, B, and D are incorrect.

In Using a Guns and Butter Production Possibilities Curve with Increasing