Question

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. decreasesb. remains constantc. increasesd. could decrease or increase depending on the technology

Answer 1

Answer:

c. increases

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

The production possibility frontier is graph that shows the two combinations of goods that an economy can produce given its resocurces.

As the production of donuts increases, the amount of beers that would be forgone in order to increase production of donuts rises.

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