ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the more resources a society uses to produce one good, the fewer resources it has available to produce another good.
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the opportunity cost of producing a good decreases as more and more of that good is produced
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of the effects of technological change
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resources are specialized; that is, some are better at producing particular goods rather than other goods. (Apples & Carrots example)
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Detailed explanation-1: -The curve bows outwards because of the Law of Increasing Opportunity Cost, which states that the amount of a good which has to be sacrificed for each additional unit of another good is more than was sacrificed for the previous unit.
Detailed explanation-2: -The downward slope of the production possibilities curve is an implication of scarcity. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. Such an allocation implies that the law of increasing opportunity cost will hold.
Detailed explanation-3: -Answer and Explanation: The correct answer is: c. increases. The production possibilities frontier with a bowed-out shape implies that the opportunity cost along the PPF increases as more of a commodity is produced in exchange for the other.
Detailed explanation-4: -The correct option is a) increases It is correct because the concept of increasing opportunity cost states that if the production possibilities frontier bowed outward and produced one more unit, the opportunity cost will also rise with rising units.