Figure 2-3

-Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle, and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-3 represent his production possibilities frontier that displays increasing opportunity costs?

Question

Figure 2-3
 
-Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.A portion of his land is more suitable for raising cattle, and the other portion is better suited for raising llamas.Which of the graphs in Figure 2-3 represent his production possibilities frontier that displays increasing opportunity costs?

Quizplus · Accepted Answer

Graph C shows a concave shape, indicating increasing opportunity costs as the production of one good increases. This is because Sergio Vignetto has to give up more and more of the other good to produce more of the first good. Graph A is a straight line, indicating constant opportunity costs, and Graph B is a bowed-out shape, indicating decreasing opportunity costs.

Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto Raises Cattle and Llamas on Cattle