Assume that country X produces two goods-sugar and shoes-and that the country's production possibility curve is "bowed-out." As the country produces more sugar the opportunity cost of sugar in terms of shoes foregone will:
A)increase.
B)decrease.
C)initially increase and then decrease.
D)remain unchanged.

Question

Quizplus · Accepted Answer

When the production possibility curve is "bowed-out" or curved, it means that the opportunity cost of producing one good increases as more of it is produced. As the country produces more sugar, it will have to sacrifice more and more of the resources that could have been used to produce shoes, resulting in a higher opportunity cost for each additional unit of sugar produced. Therefore, the answer is A - the opportunity cost of sugar in terms of shoes foregone will increase.

Assume That Country X Produces Two Goods-Sugar and Shoes-And That