If a country attempts to increase the production of one good, it will have to give up an ever increasing amount of the other good because the resources are not equally productive in different productions. Because of this increasing opportunity cost the curve is concave (as seen from the origin). This imposes a difficult choice on each society in deciding which combination of goods best meets the tastes of its people.
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Resources are NOT equally productive in different types of productions. They tend to be specialized. This is especially true for employees who are normally most productive using their best skills. If a nation attempted to increase the production of one good by shifting employees away from the jobs in which they are most productive, total output would decrease. That is stated in the law of increasing opportunity cost. |
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