An increase in production of one good will have zero opportunity cost only if the economy initially existed at a point inside the production possibilities curve.

Question

Quizplus · Accepted Answer

When an economy is operating inside the production possibilities curve, it means that not all resources are being used efficiently. Therefore, increasing the production of one good can be done without sacrificing the production of another, resulting in a zero opportunity cost for that increase.

An Increase in Production of One Good Will Have Zero