Final answer:
The student's question is about the Production Possibilities Curve (PPC), an economic model showing the trade-off between two goods. On a PPC, increasing the production of one good means reducing the production of another due to limited resources, reflecting the concept of opportunity cost.
Step-by-step explanation:
The student's question pertains to the concept of the Production Possibilities Curve (PPC), which is a model used in economics to illustrate the trade-offs associated with allocating resources between the production of two goods. On a PPC, you can only produce more of one good if you produce less of the other. This is because resources are limited and must be divided between production possibilities.
For example, suppose Plant 1 can produce 200 pairs of skis per month when it produces only skis and 100 snowboards per month when it produces only snowboards. If Plant 1 is currently producing 200 pairs of skis and zero snowboards, and it wants to start producing snowboards while maintaining full production capacity, it needs to reduce the number of skis produced. The opportunity cost is the amount of skis sacrificed to produce additional snowboards.
As per the case provided, the opportunity cost increases as production of snowboards ramps up. Initially, producing 100 snowboards would cost half a pair of skis each, then one pair of skis each for the next 100 snowboards, and ultimately two pairs of skis for each additional snowboard thereafter. This phenomenon is known as the law of increasing opportunity cost and shows why the PPC is typically a bowed-outward curve.