Use the following to answer question(s):
Exhibit: Sugar and Freight Trains

-(Exhibit: Sugar and Freight Trains) The "bowed-out" shape of the production possibilities curve shown here demonstrates:
A) that freight trains cost more than sugar.
B) that sugar costs more than freight trains.
C) that the opportunity cost of additional freight trains increases as the economy produces more and more of them.
D) that the opportunity cost of additional freight trains decreases as the economy produces more and more of them.

Question

Use the following to answer question(s): 
Exhibit: Sugar and Freight Trains
 
-(Exhibit: Sugar and Freight Trains) The "bowed-out" shape of the production possibilities curve shown here demonstrates:
A) that freight trains cost more than sugar. 
B) that sugar costs more than freight trains. 
C) that the opportunity cost of additional freight trains increases as the economy produces more and more of them. 
D) that the opportunity cost of additional freight trains decreases as the economy produces more and more of them.

Quizplus · Accepted Answer

The bowed-out shape of the production possibilities curve demonstrates that the opportunity cost of additional freight trains increases as the economy produces more and more of them. This is because resources are not perfectly adaptable to the production of both goods, so as more resources are allocated towards producing freight trains, the economy must give up increasing amounts of sugar production to do so. Therefore, the opportunity cost of producing each additional freight train increases.

Use the Following to Answer Question(s)