Refer to the information provided in Figure 21 below to answ

Refer to the information provided in Figure 2.1 below to answer the questions that follow. The shape of the economy\'s production possibility frontier shows: Consumer goods Figure 2.1 decreasing opportunity costs. constant opportunity costs. increasing opportunity costs. increasing sunk costs

Solution

Correct option is (3).

The PPF shown in graph is bowed out in shape. A bowed out PPF reflects increasing opportunity cost, meaning that opportunity cost increases as we move along the PPF.