If a production possibility frontier (PPF)is drawn concave to the origin with the quantity of shoes on the X-axis and the quantity of T-shirts on the Y-axis,a movement downward along the PPF reflects:
A)an increasing opportunity cost of producing T-shirts.
B)an increasing opportunity cost of producing shoes.
C)constant opportunity cost of producing T-shirts.
D)constant opportunity cost of producing shoes.

Question

Quizplus · Accepted Answer

A concave PPF indicates increasing opportunity costs. As we move down along the PPF, producing each additional unit of shoes requires giving up more and more T-shirts, reflecting an increasing opportunity cost of producing shoes.

If a Production Possibility Frontier (PPF)is Drawn Concave to the Origin