Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:
A)computers, but not bicycles, is subject to increasing opportunity costs.
B)bicycles, but not computers, is subject to increasing opportunity costs.
C)both bicycles and computers is subject to constant opportunity costs.
D)both bicycles and computers is subject to increasing opportunity costs.

Question

Refer to the above diagram.The movement down the production possibilities curve from point A to point E suggests that the production of:
A)computers, but not bicycles, is subject to increasing opportunity costs. 
B)bicycles, but not computers, is subject to increasing opportunity costs. 
C)both bicycles and computers is subject to constant opportunity costs. 
D)both bicycles and computers is subject to increasing opportunity costs.

Quizplus · Accepted Answer

The movement down the production possibilities curve from point A to point E suggests that the production of both bicycles and computers is subject to increasing opportunity costs. This means that as more and more of one good is produced, the opportunity cost of producing an additional unit of that good increases. In other words, society must give up more and more of the other good in order to produce more units of the first good.

Refer to the Above Diagram