When a production possibilities frontier is bowed outward,as more of one good is produced,its opportunity cost
A) increases.
B) decreases.
C) remains constant.
D) might increase, decrease, or remain constant depending on how much people value the additional units of the good.
E) cannot be predicted.

Question

Quizplus · Accepted Answer

When a production possibilities frontier is bowed outward, it means that the opportunity cost of producing one good increases as more of it is produced. This is because the resources used to produce that good are specialized and not equally efficient in producing the other good. Thus, producing more of that good requires giving up larger amounts of the other good, which makes the opportunity cost of the additional units of that good higher.

When a Production Possibilities Frontier Is Bowed Outward,as More of One