Answer to Question #289666 in Economics for Yyhhu

Question

4.

What is the reason for increasing opportunity costs?

Why do the production frontiers of different nations

have different shapes?

Answer 1

If we raise production of one product, the opportunity cost of making the next unit rises. This occurs because the producer reallocates resources to make that product.

The shape of the PPF depends on whether there are increasing, decreasing, or constant costs.