(the “run”). This is the opportunity cost of the additional education.

The PPF and the Law of Increasing Opportunity Cost

The budget constraints that we presented earlier in this chapter, showing individual choices about what

quantities of goods to consume, were all straight lines. The reason for these straight lines was that the relative

prices of the two goods in the consumption budget constraint determined the slope of the budget constraint.

However, we drew the production possibilities frontier for healthcare and education as a curved line. Why does

the PPF have a different shape?

To understand why the PPF is curved, start by considering point A at the top left-hand side of the PPF. At point

A, all available resources are devoted to healthcare and none are left for education. This situation would be

extreme and even ridiculous. For example, children are seeing a doctor every day, whether they are sick or not,
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