-A PPF, such as the one above, that bows outward illustrates
A) decreasing opportunity cost.
B) increasing opportunity cost.
C) that technology is improving.
D) that productivity is falling.

Question

-A PPF, such as the one above, that bows outward illustrates
A) decreasing opportunity cost. 
B) increasing opportunity cost. 
C) that technology is improving. 
D) that productivity is falling.

Quizplus · Accepted Answer

A PPF (Production Possibility Frontier) that bows outward illustrates increasing opportunity cost. This shape indicates that as you produce more of one good, you have to give up increasingly larger amounts of the other good, due to factors such as resource specialization and inefficiencies in reallocating resources.

-A PPF, Such as the One Above, That Bows Outward