Final answer:
Crusoe's opportunity cost of producing an extra pound of berries increases as more berries are produced. This is due to the scarcity of resources, which become more valuable as they are stretched further in production. The opportunity cost is reflected in the slope of the production possibilities curve, with a steeper slope indicating a greater opportunity cost.
Step-by-step explanation:
The question concerns opportunity cost, which is a fundamental concept in economics. The opportunity cost of producing an extra pound of berries increases as more berries are produced. This is because resources used to produce berries could have been used to produce other goods, and as production of berries increases,
the resources become scarcer, leading to a greater opportunity cost for each additional pound of berries. In terms of the production possibilities curve, a steeper slope indicates a greater opportunity cost.
As a practical example, consider the concept of marginal utility and opportunity cost in consumption, where a consumer deciding between bus tickets and burgers will eventually find the opportunity cost of the marginal utility of foregone burgers exceeding the marginal utility of an additional bus ticket,
at which point they would stop purchasing more bus tickets. The consumer behaves similarly in production, allocating resources where the marginal cost doesn’t exceed the price or the marginal benefit to society.
Opportunity costs are vital in production and consumption decisions, as they guide individuals and firms to make the most efficient use of resources.