Increasing opportunity costs suggest that
A) resources are not perfectly shiftable between the production of two goods.
B) resources are fully shiftable between the production of two goods.
C) a country's production possibilities frontier appears as a straight line.
D) a country's production possibilities frontier is bowed inward (i.e., convex) in appearance.

Question

Quizplus · Accepted Answer

Increasing opportunity costs occur because resources are not perfectly adaptable for producing different goods, leading to inefficiencies when shifting from the production of one good to another. This concept is a fundamental principle in economics, illustrating why the production possibilities frontier is typically bowed outward (concave to the origin), not inward, as resources specialized for one type of production might not be as efficient in another.

Increasing Opportunity Costs Suggest That