Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two goods will be
A) a straight, upward- sloping line.
B) bowed outward.
C) a straight, downward- sloping line.
D) All of the above are possible and more information is needed to determine which answer is correct.

Question

Quizplus · Accepted Answer

When the opportunity cost of producing one good increases as more of it is produced, the production possibilities frontier will be bowed outward (also known as concave). This is because resources are not equally efficient in producing both goods, causing the opportunity cost to increase as production of one good increases.

Consider a PPF for Tapes and Soda