Figure 2-14
-Refer to Figure 2-14.The opportunity cost of an additional doghouse increases as more doghouses are produced.

Question

Figure 2-14 
-Refer to Figure 2-14.The opportunity cost of an additional doghouse increases as more doghouses are produced.

Quizplus · Accepted Answer

This is because the slope of the production possibilities frontier (PPF) is downward sloping, indicating that in order to produce more doghouses, fewer of the other good (dog toys) can be produced. As more and more doghouses are produced, the opportunity cost in terms of dog toys becomes increasingly higher.

Figure 2-14 -Refer to Figure 2-14.The Opportunity Cost of an Additional Doghouse