Consider a PPF for tapes and soda. If the opportunity cost of a tape increases as the quantity of tapes produced increases and also the opportunity cost of a soda increases as the quantity of soda produced increases, then the PPF between the two goods will be
A) a straight, downward-sloping line.
B) a straight, upward-sloping line.
C) bowed outward.
D) All of the above are possible and more information is needed to determine which answer is correct.

Question

Quizplus · Accepted Answer

The PPF is bowed outward when the opportunity cost increases as the production of one good increases, indicating increasing opportunity costs for both goods as their production levels increase. This shape reflects the law of increasing opportunity costs.

Consider a PPF for Tapes and Soda