A production frontier that is concave from the origin indicates that the nation incurs increasing opportunity costs in the production of:
A)commodity X only
B)commodity Y only
C)both commodities
D)neither commodity

Question

Quizplus · Accepted Answer

A concave production frontier implies that the nation incurs increasing opportunity costs. This means that as the production of one commodity increases, the production of the other commodity will decrease at an increasing rate. Therefore, the nation incurs increasing opportunity costs in the production of both commodities.

A Production Frontier That Is Concave from the Origin Indicates