If a production possibility frontier 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 upward along the PPF reflects:
A)an increasing opportunity cost of T-shirts.
B)an increasing opportunity cost of both shoes and T-shirts.
C)a decreasing opportunity cost of T-shirts.
D)a decreasing opportunity cost of both shoes and T-shirts.

Question

Quizplus · Accepted Answer

A concave PPF indicates increasing opportunity costs, so a movement upward along the PPF reflects an increase in the opportunity cost of the good being produced less. In this case, that is T-shirts, as we move from producing more shoes to more T-shirts. Thus, the correct answer is an increasing opportunity cost of T-shirts (choice A).

If a Production Possibility Frontier Is Drawn Concave to the Origin