Asked by
Noelia Cordova
on Nov 05, 2024
Verified
A society can produce two goods: donuts and beer. The society's production possibility frontier is negatively sloped and "bowed outward" from the origin. As this society moves up its production possibility frontier, producing more and more units of donuts, the opportunity cost of producing beer
A) decreases.
B) remains constant.
C) increases.
D) could decrease or increase depending on the technology.
Opportunity Cost
The cost of forgoing the next best alternative when making a decision or choosing one option over another.
Production Possibility Frontier
A graph that shows the highest production potential for two different products based on specific resources and factors.
Technology
Application of scientific knowledge for practical purposes, especially in industry.
- Assess the geometry of the Production Possibility Frontier to infer what it signifies about opportunity costs, specifically if they are steady, rise, or fall.
Verified Answer
MG
Learning Objectives
- Assess the geometry of the Production Possibility Frontier to infer what it signifies about opportunity costs, specifically if they are steady, rise, or fall.