Increasing opportunity cost while moving along a production possibility frontier is due to

a. the fact that resources are not equally good in each production activity

b. the fact that resources are unemployed and/or misallocated

c. the fact that the marginal benefit of each good is decreasing

d. the fact that resources and technology are held constant when we draw a PPF

Question

Tyree Zamora

Business

4 December, 12:41

Increasing opportunity cost while moving along a production possibility frontier is due to

a. the fact that resources are not equally good in each production activity

b. the fact that resources are unemployed and/or misallocated

c. the fact that the marginal benefit of each good is decreasing

d. the fact that resources and technology are held constant when we draw a PPF

+4

Answers (1)

Know the Answer?

Winston · Answer 1

The correct answer to this question is A) because resources are not equally good in each production activity.

Explanation:

PPS or Production possibility frontier (which is often as production possibility curve) shows the possible combinations (of two products or services) with maximum outputs that can be produced in an economy when all the available resources are fully and efficiently used.

The reason why opportunity cost is increased while moving along PPS is because when we increase the output of one good, that means we are allocating more resources towards this good, that means we will be left with the fewer resources to carry out the production of other good, so therefore the opportunity cost would increase.