Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis<\/p>\n\n\n\n
A) increases.<\/p>\n\n\n\n
B) decreases.<\/p>\n\n\n\n
C) is constant.<\/p>\n\n\n\n
D) is 0.<\/p>\n\n\n\n
E) is infinite.<\/p>\n\n\n\n
The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n The production possibilities frontier (PPF) represents the maximum combination of two goods that an economy can produce given its available resources and technology. Any point inside the PPF indicates underutilization of resources<\/strong> (such as unemployment, inefficiency, or unused capital). A point on the PPF represents efficient resource use<\/strong>, meaning all available resources are fully employed.<\/p>\n\n\n\n When moving from a point inside the PPF to a point on the PPF<\/strong>, the economy is simply utilizing idle or inefficiently used resources to produce more of one or both goods. Since these additional resources were not being used before, there is no opportunity cost<\/strong> in shifting them into production. In other words, the economy can increase production without having to reduce output of the other good.<\/p>\n\n\n\n Opportunity cost arises when increasing production of one good requires reducing production of another good<\/strong> due to resource scarcity. However, in this scenario, because the economy is moving from an inefficient point to an efficient one, it is merely making better use of available resources, and no trade-off occurs between the two goods. Therefore, the opportunity cost of producing more of the good on the horizontal axis remains zero<\/strong> during this transition.<\/p>\n\n\n\n Once the economy reaches the PPF, any further increase in one good’s production will require sacrificing<\/strong> some of the other good, leading to a positive opportunity cost. At that stage, the opportunity cost typically increases due to the law of increasing opportunity costs<\/strong>, which states that resources are not perfectly adaptable between different types of production.<\/p>\n\n\n\n In conclusion, while inside the PPF, increasing production does not require sacrificing anything, making the opportunity cost zero<\/strong> (D).<\/p>\n","protected":false},"excerpt":{"rendered":" Moving from a point inside the production possibilities frontier to a point on the production possibilities frontier, the opportunity cost of producing more of the good on the horizontal axis A) increases. B) decreases. C) is constant. D) is 0. E) is infinite. The correct answer and explanation is : Correct Answer: D) is 0. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-203697","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203697","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=203697"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203697\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=203697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=203697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=203697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Correct Answer: D) is 0.<\/strong><\/h3>\n\n\n\n
Explanation:<\/h3>\n\n\n\n