The fact that individual productive resources are NOT equally useful in all activities
A) follows from the law of demand.
B) implies a linear production possibilities frontier.
C) implies that a production possibilities frontier will be bowed outward.
D) implies that gain from specialization and trade is unlikely.

Question

Quizplus · Accepted Answer

The production possibilities frontier is bowed outward because of the concept of diminishing marginal returns, which means that individual productive resources become less and less useful as more of them are used in a given activity. Therefore, the resources are not equally useful in all activities, leading to a bowed outward PPF.

The Fact That Individual Productive Resources Are NOT Equally Useful