Answer to Question #284028 in Economics for Hafsa

Question

What is the reason for increasing opportunity costs? Why do the production frontiers of different nations have different shapes? 

Answer 1

The increasing marginal opportunity cost is due to the fact that some resources are better suited for producing one good than another.

The Production Possibilities Frontier (PPF) is a graph that shows all the different combinations of output of two goods that can be produced using available resources and technology. The shape of the PPF depends on whether there are increasing, decreasing, or constant costs.