If there is increasing opportunity cost,then when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.
A) increases and the PPF gets steeper
B) increases and the PPF gets flatter
C) decreases and the PPF gets steeper
D) decreases and the PPF gets flatter
E) does not change and the PPF gets steeper

Question

Quizplus · Accepted Answer

Increasing opportunity cost means that producing more of one good requires giving up increasingly larger amounts of the other good. This leads to a steeper slope of the PPF. When moving downward on the PPF, the production of the good on the horizontal axis increases and the production of the good on the vertical axis decreases. This means that more and more resources have to be shifted from the production of the vertical good to the production of the horizontal good. Since resources are not perfectly adaptable to the production of both goods, the opportunity cost of producing the horizontal good increases as more of it is produced, leading to a steeper PPF.

If There Is Increasing Opportunity Cost,then When Moving Downward on a Production