Suppose Poland is producing on its production possibilities frontier,and it decides to increase the production of steel and decrease the production of vodka.The bowed-out production possibility frontier suggests that there will be a(n)_____ opportunity cost of producing more steel.
A)increasing
B)decreasing
C)nonexistent
D)unchanged

Question

Quizplus · Accepted Answer

The bowed-out (concave) shape of the production possibilities frontier suggests increasing opportunity costs. This means that as Poland produces more steel, it will have to give up increasing amounts of vodka. Therefore, the opportunity cost of producing more steel will be increasing.

Suppose Poland Is Producing on Its Production Possibilities Frontier,and It