The law of increasing opportunity cost explains why the shape of the production possibilities curve is:
A) a straight line parallel to the horizontal axis.
B) a straight line from one axis to the other.
C) bowed out (concave)from the origin of the graph.
D) bowed inward (convex)to the origin of the graph.

Question

Quizplus · Accepted Answer

The law of increasing opportunity cost states that to produce more of one good, a larger and larger amount of the other good must be sacrificed. As a result, the production possibilities curve is bowed out (concave) from the origin of the graph because the opportunity cost of producing additional units of a good increases as more of it is produced.

The Law of Increasing Opportunity Cost Explains Why the Shape