The presence of increasing opportunity costs gives rises to production possibilities frontiers that are
A) downward-sloping straight lines.
B) upward-sloping straight lines.
C) bowed outward from the diagram's origin.
D) bowed inward toward the diagram's origin.

Question

Quizplus · Accepted Answer

The presence of increasing opportunity costs means that in order to produce more of a good, increasingly larger amounts of the other good must be given up. This leads to a bowed-out shape for the production possibilities frontier, as shown in Figure 2.3.

The Presence of Increasing Opportunity Costs Gives Rises to Production