Use the following to answer question(s): Production Possibilities Curve

-(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Question

Use the following to answer question(s): Production Possibilities Curve
 
-(Exhibit: Production Possibilities Curve) If an economy is operating on its production possibilities curve, the law of increasing opportunity costs predicts that:

Quizplus · Accepted Answer

According to the law of increasing opportunity costs, as an economy moves along its production possibilities curve and produces more of one good, it must give up increasing amounts of the other good. In this case, as more tractors are produced, more and more drill presses must be given up. This is reflected in the concave shape of the production possibilities curve, which indicates increasing opportunity costs.

Use the Following to Answer Question(s): Production Possibilities Curve