What occurs as you move down the curve of the production possibility frontier?

As you move down the curve of the production possibility frontier (PPF), the opportunity cost of producing one good in terms of the other good increases. This phenomenon occurs because resources are not perfectly adaptable for the production of both goods. Initially, when you give up a small quantity of one good to produce more of another, you typically give up relatively less because the most efficient resources are being used first. However, as you continue to allocate more resources towards the production of one good, you start utilizing resources that are less suited for that purpose. This results in increasingly larger amounts of the other good being sacrificed for additional units of the first good, hence reflecting an increasing opportunity cost.

The PPF illustrates the concept of scarcity and trade-offs in an economy, highlighting that increased production of one good requires greater sacrifices of the other. Therefore, the correct understanding of the opportunity cost in this context is that it indeed increases as we move further down the curve.