If There Is Increasing Opportunity Cost,then When Moving Downward on a Production

question 276

Multiple Choice

If there is increasing opportunity cost,then when moving downward on a production possibilities frontier,the opportunity cost of the good on the horizontal axis ________ as more of the good is produced.

• A) increases and the PPF gets steeper
• B) increases and the PPF gets flatter
• C) decreases and the PPF gets steeper
• D) decreases and the PPF gets flatter
• E) does not change and the PPF gets steeper

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Definitions:

Intermediate Good

A product used to produce a final good or finished product.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period of time, typically annually.

Inventories

Raw materials, work-in-progress goods, and completely finished products that companies hold to facilitate business operations.

Intermediate Goods

Products that are used as inputs in the production of other goods or services rather than being bought by consumers.