Opportunity Cost Rises with Steeper PPF Segments

Steps:

• Locate points on the production possibilities frontier (PPF) for goods X and Y.
• Calculate opportunity cost as units of Y forgone per additional unit of X, measured by the PPF's slope magnitude.
• Identify the steepest segment, where the curve bows out most, indicating highest cost per law of increasing opportunity costs.
• Compare segments: largest cost occurs over the steepest interval.

Why D is correct:

• From G to H, the PPF is steepest, requiring the most Y sacrificed per X gained, per the law of increasing opportunity costs.

Why the others are wrong:

• A: E to F is on the flattest part, yielding lowest opportunity cost.
• B: E to G spans flatter initial segments, with lower average cost.
• C: E to H averages costs across flatter and steeper parts, understating the peak cost.

Final answer: D