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Figure: Production Possibility Frontier
-(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. This production possibility frontier is:
A)bowed out because of increasing opportunity costs.
B)bowed in because of increasing opportunity costs.
C)bowed in because of constant cost of cars and computers.
D)linear because of constant costs.

Question

Use the following to answer questions :
Figure: Production Possibility Frontier 
-(Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. This production possibility frontier is:
A)bowed out because of increasing opportunity costs. 
B)bowed in because of increasing opportunity costs. 
C)bowed in because of constant cost of cars and computers. 
D)linear because of constant costs.

Quizplus · Accepted Answer

The production possibility frontier is bowed out, indicating increasing opportunity costs. As the production of one good increases, the opportunity cost of producing that good increases, resulting in a bowed-out shape of the curve.

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