-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,
A) the output of Y increases.
B) unemployment increases.
C) the opportunity cost of each new unit of X increases.
D) the opportunity cost of each new unit of X decreases.

Question

-Refer to the table above, which gives five points on a nation's PPF. As we increase the production of X,
A) the output of Y increases. 
B) unemployment increases. 
C) the opportunity cost of each new unit of X increases. 
D) the opportunity cost of each new unit of X decreases.

Quizplus · Accepted Answer

The principle of increasing opportunity costs states that as production of one good (X) increases, the opportunity cost of producing an additional unit of that good increases because resources are not equally efficient in producing all goods. This is reflected in the shape of the Production Possibility Frontier (PPF), where moving towards more of one good results in giving up increasingly larger amounts of the other good (Y).

-Refer to the Table Above, Which Gives Five Points on a Nation's