The graph shows Brazil's PPF for ethanol and food crops. Does Brazil face an increasing opportunity cost of ethanol? What feature of Brazil's PPF illustrates increasing opportunity cost? Brazil faces opportunity cost of producing a barrel of ethanol, which is shown by the of the PPF. A. an increasing; increasing slope of the PPF as more ethanol is produced B. an increasing; bowed-out shape C. a constant; smooth shape D. a decreasing; bowed-out shape

Question

The graph shows Brazil's PPF for ethanol and food crops. Does Brazil face an increasing opportunity cost of ethanol? What feature of Brazil's PPF illustrates increasing opportunity cost? Brazil faces opportunity cost of producing a barrel of ethanol, which is shown by the of the PPF. A. an increasing; increasing slope of the PPF as more ethanol is produced B. an increasing; bowed-out shape C. a constant; smooth shape D. a decreasing; bowed-out shape

Answer 1

The question is asking whether Brazil faces an increasing opportunity cost of ethanol and what feature of Brazil's PPF (Production Possibility Frontier) illustrates this increasing opportunity cost. The Production Possibility Frontier (PPF) is a curve that shows the different combinations of two goods that an economy can produce efficiently with the available resources and technology. The slope of the PPF represents the opportunity cost of producing one good over the other. An increasing opportunity cost more of one good is produced, the opportunity cost of producing that good increases. This is typically represented by a bowed-out shape of the PPF, indicating that the resources are not perfectly adaptable to the production of both goods. Therefore, the correct answer is B. an increasing; bowed-out shape. This means that as Brazil produces more ethanol, the opportunity cost of producing ethanol increases, which is shown by the bowed-out shape of the PPF.

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