The law of increasing opportunity costs is reflected in a production possibilities curve which is:
A)an upward sloping straight line.
B)a downward sloping straight line.
C)concave to the origin.
D)convex to the origin.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as an economy specializes in the production of one good, the opportunity cost of producing each additional unit of that good increases. This is reflected in a production possibilities curve that is concave to the origin, meaning that as we move along the curve, we must give up increasingly larger amounts of one good to produce additional units of the other good. Thus, choice C is the correct answer as it describes a curve that is concave to the origin.

The Law of Increasing Opportunity Costs Is Reflected in a Production