A bowed-out production possibility frontier shows that the
A)opportunity cost of producing another good is negative.
B)opportunity cost of a good increases as more of the good is produced.
C)opportunity cost relationship is linear.
D)opportunity cost of a good is constant as more of the good is produced.
E)opportunity cost of a good decreases as more of the good is produced.

Question

Quizplus · Accepted Answer

A bowed-out production possibility frontier indicates that as more of one good is produced, the opportunity cost of producing additional units of that good increases. This is because resources are not equally efficient in producing both goods, and as more resources are allocated to one good, the opportunity cost of producing additional units increases. Therefore, B is the correct answer.

A Bowed-Out Production Possibility Frontier Shows That the