Assume that resources are NOT perfectly adaptable to the production of both good A and good B.Which statement best corresponds to this situation?

Question

Quizplus · Accepted Answer

When resources are not adaptable, they are better suited for producing one good over another. As a result, as more of good A is produced, the opportunity cost of producing it increases because more and more resources that are less suited for producing A have to be diverted away from producing B. This leads to a production possibility frontier that bows outward, indicating increasing opportunity costs. Therefore, choice A is the correct answer. Choice B is the opposite of what happens in this situation, choice C is not necessarily true, and choice D is incorrect because opportunity cost changes as production of A increases.

Assume That Resources Are NOT Perfectly Adaptable to the Production