The principle of increasing opportunity cost leads to
A) a production possibilities frontier (PPF) that is bowed inward from the origin.
B) a production possibilities frontier (PPF) that is bowed outward from the origin.
C) an inward shift of the production possibilities frontier (PPF).
D) an outward shift of the production possibilities frontier (PPF).

Question

Quizplus · Accepted Answer

The principle of increasing opportunity cost states that as production of a good increases, the opportunity cost of producing an additional unit rises. This leads to a production possibilities frontier (PPF) that is bowed outward from the origin, reflecting the increasing cost of producing more of one good in terms of sacrificing the production of another.

The Principle of Increasing Opportunity Cost Leads to