A typical bowed-out production possibility frontier between two goods,guns and butter,shows that the opportunity cost of butter in terms of guns increases as more butter is produced.This implies that the opportunity cost of guns in terms of butter decreases as more guns are produced.

Question

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The opportunity cost of guns in terms of butter also increases as more guns are produced, reflecting the principle of increasing opportunity costs due to the reallocation of resources from the production of one good to the other.

A Typical Bowed-Out Production Possibility Frontier Between Two Goods,guns and Butter,shows