Asked by Rachel Romero on Jul 21, 2024
Verified
If an economy has to sacrifice increasing amounts of good X for each additional unit of good Y produced,then its production possibility frontier is:
A) bowed out.
B) bowed in.
C) a straight line.
D) a vertical line.
Production Possibility Frontier
A curve depicting the maximum attainable combinations of two products that may be produced with available resources and technology.
Good X
Often refers to a specific product or commodity being analyzed or discussed in economic models.
Good Y
A generic term used in economic models to represent a particular product or service in the market.
- Recognize the principle of increasing opportunity cost and its depiction on the Production Possibility Frontier.
Verified Answer
MC
Madison CoriellJul 25, 2024
Final Answer :
A
Explanation :
A bowed out production possibility frontier (PPF) indicates increasing opportunity cost, where producing additional units of one good requires giving up more and more units of another good. This is consistent with the scenario presented in the question, where increasing amounts of good X must be sacrificed for each additional unit of good Y produced.
Learning Objectives
- Recognize the principle of increasing opportunity cost and its depiction on the Production Possibility Frontier.
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