The fact that a society's production possibilities curve is bowed out from the origin of a graph demonstrates the law of:
A) increasing opportunity cost.
B) decreasing opportunity cost.
C) constant opportunity cost.
D) convex opportunity cost.

Question

Quizplus · Accepted Answer

The bowed-out shape of the production possibilities curve indicates that in order to produce more of one good, increasingly larger quantities of the other good must be given up. This illustrates the concept of increasing opportunity cost, where the opportunity cost of producing additional units of a good increases as more of it is produced.

The Fact That a Society's Production Possibilities Curve Is Bowed