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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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Solution Summary

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

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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 ...

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