When a production possibilities frontier is bowed outward,the opportunity cost of the second good in terms of the first good is higher when the economy is producing much of the second good and little of the first good than it is when the economy is producing little of the second good and much of the first good.

Question

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The bowed-out shape of the production possibilities frontier represents increasing opportunity costs. As more of one good is produced, the opportunity cost of producing an additional unit of that good increases because the resources that are best suited for producing it are already being used. Therefore, when the economy is producing a lot of the second good and little of the first good, the opportunity cost of producing an additional unit of the second good is high, and the opportunity cost of producing the first good is low. This relationship is reversed when the economy produces more of the first good and less of the second good.

When a Production Possibilities Frontier Is Bowed Outward,the Opportunity Cost