Consider a production possibility frontier with jeans on the vertical axis and shoes on the horizontal axis.As a country moves along the frontier closer to the vertical axis,
A) the opportunity cost of producing jeans increases.
B) the opportunity cost of producing shoes increases.
C) there are fewer tradeoffs.
D) inefficient production occurs.
E) the opportunity cost of producing jeans decreases.

Question

Quizplus · Accepted Answer

Moving along the production possibility frontier towards the vertical axis means that the country is increasing the production of jeans and decreasing the production of shoes. As the production of jeans increases, the resources that are better suited for producing shoes are being diverted to jeans production, which results in an increase in the opportunity cost of producing jeans. Therefore, the answer is A, the opportunity cost of producing jeans increases.

Consider a Production Possibility Frontier with Jeans on the Vertical