Question

What happens to the
opportunity cost of
producing additional
units of a good as we
move from left of right
on a production
possibility curve which is
downward sloping and
concave to the origin?

Answer 1

Answer:

The law of increasing opportunity cost holds that as an economy moves along its production possibilities curve in the direction of producing more of a particular good, the opportunity cost of additional units of that good will increase

Answer 2

1. Opportunity cost is the cost of next best alternative that is given up while choosing some other option.
2. If production of one good is increased the opportunity cost of producing more of one good also increase.
3. It is applicable in both cases whether you move from right to left or left to right.
4. Increasing opportunity cost is the reason why production possibility curve is concave to the origin.