If production involves increasing opportunity cost, then on the production possibilities frontier, moving to a point closer to the horizontal axis will increase the opportunity cost of
A)the good that is shown on the horizontal axis.
B)the good that is shown on the vertical axis.
C)both of the goods shown on the axes.
D)neither of the goods shown on the axes.

Question

Quizplus · Accepted Answer

When moving closer to the horizontal axis, the production of the good shown on the vertical axis increases while the production of the good shown on the horizontal axis decreases. This means that the opportunity cost of producing one unit of the good shown on the horizontal axis increases, as more and more units of the other good must be given up to produce it. Therefore, the answer is A.

If Production Involves Increasing Opportunity Cost, Then on the Production