Increasing opportunity cost implies that
A) producing additional units of one good results in proportionately smaller reductions in the output of the other good.
B) producing additional units of one good results in increasing amounts of lost output of the other good.
C) the production possibilities frontier will be a straight line.
D) the society will be producing inside its production possibilities frontier.

Question

Quizplus · Accepted Answer

Increasing opportunity cost means that as you produce more of one good, the amount of the other good that you have to give up increases. This is because resources are not equally efficient in producing all goods, so as you shift resources to produce more of one good, you start using resources that are less suited for that production, leading to larger and larger sacrifices of the other good.

Increasing Opportunity Cost Implies That