Explain how the figures in a PPF illustrate the principle of increasing opportunity cost?
Answer:
The opportunity cost of producing one good (in a two good world) is depicted as the slope of the PPF. So, notice that as you move to the right along the PPF (well, to the right and down along the PPF), the slope increases. That is, it gets steeper! THIS is how the PPF illustrates the increasing opportunity cost.
The slope tells you the opportunity cost of producing the good on the horizontal axis in terms of the good on the vertical axis.
Trevor hit it exactly
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