Answer to Question #40773 in Economics of Enterprise for vincent

Question

On a set of axes, sketch a concave production frontier. Starting near the midpoint on the production frontier, use arrows to show that the nation incurs increasing opportunity costs in producing more of X (the commodity measured along the horizontal axis) and in producing more of Y. How does the slope of the production function change as the nation produces more of X? How about more of Y? What do these changes reflect?

Answer 1

The slope of the production function will decrease as the nation produces more of X and will increase as the nation produces more of Y. These changes reflect the increase of the opportunity cost of producing one of the goods X and Y.