The fact of increasing opportunity cost when moving on the PPF means that
A) to increase the production of one product requires larger and larger sacrifices of the other good.
B) to decrease the production of one product requires smaller and smaller sacrifices of the other good.
C) to increase the production of one product requires smaller and smaller sacrifices of the other good.
D) when the government forces a movement from one point on the PPF to another point, no production is lost.
E) the PPF will be a negatively sloped straight line.

Question

Quizplus · Accepted Answer

Increasing opportunity cost means that to produce more of one good, we must give up increasingly greater amounts of the other good. This is because resources are not perfectly adaptable to producing both goods, and as we shift production towards one good, the resources that are best suited to producing the other good become scarcer, driving up its opportunity cost. Therefore, option A is the correct choice.

The Fact of Increasing Opportunity Cost When Moving on the PPF