On a diagram of a production possibilities frontier, opportunity cost is represented by the production possibilities frontier shifting outward.

Question

Quizplus · Accepted Answer

Opportunity cost is not represented by the production possibilities frontier shifting outward. Instead, it is represented by the tradeoff between the production of two goods shown by the shape of the production possibilities frontier, where an increase in the production of one good results in a decrease in the production of the other.

On a Diagram of a Production Possibilities Frontier, Opportunity Cost