As we move down the bowed-out production possibilities frontier, opportunity cost
A)increases.
B)decreases.
C)remains constant.
D)initially decreases, then increases.
E)decreases but at an increasing rate.

Question

Quizplus · Accepted Answer

Opportunity cost increases as we move down the bowed-out production possibilities frontier because we have to give up increasing amounts of one good to produce additional units of the other good. This is due to the increasing marginal opportunity cost, as more and more resources that are better suited to one good have to be diverted to producing the other good.

As We Move Down the Bowed-Out Production Possibilities Frontier, Opportunity