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When moving from left to right if the slope is increasing the opportunity cost is increasing
When opportunity cost is increasing the production possibility frontier is bowed out ward
(concave to the origin)
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Constant Opportunity Cost
When opportunity cost is constant the production possibility frontier is a downward sloping
straight line
When moving from left to right if the slope is decreasing the opportunity cost is declining
When opportunity cost is decreasing the production possibility frontier is bowed inward or
convex to the origin
In a positive economic growth the economy can produce more of both goods which are
producing.
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Reasons:
1. Increasing resources
2. Destroying resources
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3. Increase in technology in production
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5 . Increase in technology in production
Practice questions
1. Explain the relationship between opportunity cost and production possibility curve.
2. Define opportunity cost. Why does opportunity cost increase along the production
possibility frontier? Explain using an appropriate example.
3. “Shape of the production possibility curve depend on the opportunity cost” Do you agree
with this statement? Justify your answer.
4. Explain these situation in increasing opportunity cost PPF with food and clothes
a. An increase in population
b. Increase in technology in clothes production
c. Decrease in demand for food
d. Ethnic war in the economy
e. Many workers unemployed
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