Reference:
Figure SEQ Figure 1: Production Possibilities Frontier
-Consider Figure 1.The opportunity cost of producing more consumer goods

Question

Reference:
Figure SEQ Figure 1: Production Possibilities Frontier 
-Consider Figure 1.The opportunity cost of producing more consumer goods

Quizplus · Accepted Answer

According to the production possibilities frontier, in order to produce more consumer goods, we have to give up some capital goods. As we move along the curve from left to right, the opportunity cost of producing one extra unit of consumer goods increases. This is because we have to give up more and more units of capital goods to produce each additional unit of consumer goods. Therefore, the correct choice is B - the opportunity cost of producing more consumer goods increases.

Reference: Figure SEQ Figure 1: Production Possibilities Frontier