Consider the production possibilities frontier in the figure shown.As more and more cars are produced the opportunity cost of producing more cars:

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Quizplus · Accepted Answer

The production possibilities frontier is a downward-sloping convex curve, which indicates increasing opportunity cost. As more cars are produced, the resources that were initially best suited for car production are used up, and the resources that are left over are less well suited for car production. Therefore, the opportunity cost of producing more cars increases. The best choice would be to produce at point A, which is the point where the economy is producing the maximum output of both cars and computers, and is therefore the most efficient point on the production possibilities frontier.

Consider the Production Possibilities Frontier in the Figure Shown