Opportunity Cost along the Production Possibility Frontier
The production possibility frontier (PPF) represents the maximum combination of goods and services that an economy can produce given its resources and technology. As we move along the PPF, the opportunity cost of producing one more unit of a good increases. This is because resources are not equally efficient in producing all goods, leading to trade-offs and increasing opportunity costs.

Explanation with an Example
Let's consider an economy that can produce only two goods - computers and smartphones. Suppose the economy is initially producing at point A on the PPF, producing 100 computers and 50 smartphones. If the economy wants to produce more smartphones, it needs to reallocate resources from computer production to smartphone production.
- At point A, the opportunity cost of producing one more smartphone is relatively low as resources are more specialized in computer production.
- As the economy moves along the PPF towards point B, where more smartphones are produced but fewer computers, the opportunity cost of producing smartphones increases. This is because resources that are better suited for computer production are being diverted to smartphone production.
- By the time the economy reaches point C, where it is producing 50 computers and 100 smartphones, the opportunity cost of producing one more smartphone is at its highest. Resources that were originally specialized in computer production are now being used for smartphone production, leading to a significant trade-off.
In conclusion, as the economy moves along the PPF, the opportunity cost of producing additional units of a good increases due to the specialization of resources and the trade-offs involved in reallocating resources from one good to another.