The law of increasing opportunity costs is reflected in a production possibilities curve that is
A) an upsloping straight line.
B) a downsloping straight line.
C) bowed out from the origin.
D) bowed in toward the origin.

Question

Quizplus · Accepted Answer

The law of increasing opportunity costs states that as the production of one good increases, the opportunity cost of producing another unit of that good increases. This leads to a production possibilities curve that is bowed out from the origin, meaning that as we produce more of one good, the production of the other good increases at a decreasing rate. Therefore, the correct answer is C.

The Law of Increasing Opportunity Costs Is Reflected in a Production