The fact of increasing opportunity cost when moving on the PPF means that
A)when the government forces a movement from one point on the PPF to another point,no production is lost.
B)to increase the production of one product requires smaller and smaller sacrifices of the other good.
C)the PPF will be a negatively sloped straight line.
D)to increase the production of one product requires larger and larger sacrifices of the other good.
E)to decrease the production of one product requires smaller and smaller sacrifices of the other good.

Question

Quizplus · Accepted Answer

Increasing opportunity cost means that to produce more of one good, we have to give up more and more of the other good. This implies that the PPF will be bow-shaped (curved) rather than a straight line. Option A is incorrect since there will always be some production loss when moving from one point on the PPF to another. Option B is incorrect since increasing opportunity cost means larger and larger sacrifices are required, not smaller and smaller. Option E is also incorrect, as decreasing the production of one product would involve smaller and smaller sacrifices of the other good.

The Fact of Increasing Opportunity Cost When Moving on the PPF