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Production Possibilities Frontier Conditions

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1. Explain the connections between opportunity cost and the production possibilities frontier ?

2. What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced ?

3. When economists state that the opportunity cost of a product increases as more of it is produced, what do they mean?

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This a pretty straightforward question. Firstly, when reading my response, I suggest you bring up an image of a PPF. By description, a PPF is one quarter of a circle contained between an X-Y axis. There is a good on each axis, with the typical example being "Guns and Butter".

Society can produce either only guns, or only butter. It can also ...

Solution Summary

This solution of 257 words defines and explains opportunity cost and production possibilities frontier.