-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X
A) rises. The opportunity cost of one more unit of good Y also rises.
B) rises. The opportunity cost of one more unit of good Y falls.
C) falls. The opportunity cost of one more unit of good Y rises.
D) falls. The opportunity cost of one more unit of good Y also falls.

Question

-As output moves from point a to point b to point c along the PPF in the above figure, the opportunity cost of one more unit of good X
A) rises. The opportunity cost of one more unit of good Y also rises. 
B) rises. The opportunity cost of one more unit of good Y falls. 
C) falls. The opportunity cost of one more unit of good Y rises. 
D) falls. The opportunity cost of one more unit of good Y also falls.

Quizplus · Accepted Answer

Moving along the Production Possibility Frontier (PPF) from point a to point b to point c, the opportunity cost of producing one more unit of good X increases because resources are not perfectly adaptable for the production of all goods. As you produce more of good X, you have to give up more of good Y, indicating the opportunity cost of good X rises. Conversely, the opportunity cost of producing one more unit of good Y falls because you are sacrificing less of good X to produce additional units of good Y.

-As Output Moves from Point a to Point B to Point