Along a production possibilities curve that is concave to the origin, the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.
A)Decreases
B)Increases
C)remains constant
D)first decreases, then increases

Question

Along a production possibilities curve that is concave to the origin, the opportunity cost of production of the good on the horizontal axis ____ as we move down along the curve.
A)​Decreases
B)​Increases
C)​remains constant
D)​first decreases, then increases

Quizplus · Accepted Answer

The concavity of the production possibilities curve indicates that there are increasing opportunity costs as we move down along the curve. This means that in order to produce more of the good on the horizontal axis, we must give up increasing amounts of the other good. Therefore, the opportunity cost of production on the horizontal axis increases.

Along a Production Possibilities Curve That Is Concave to the Origin