-The production possibilities frontier in Figure 1.1 is concave to the origin because:
A) resources are equally substitutable between the production of food and films.
B) society can have more food only if it produces more films.
C) the cost of food in terms of films is constant.
D) the opportunity cost of food in terms of films increases are more films are produced.

Question

-The production possibilities frontier in Figure 1.1 is concave to the origin because:
A) resources are equally substitutable between the production of food and films. 
B) society can have more food only if it produces more films. 
C) the cost of food in terms of films is constant. 
D) the opportunity cost of food in terms of films increases are more films are produced.

Quizplus · Accepted Answer

The production possibilities frontier is concave to the origin because of increasing opportunity costs, meaning as more of one good (films) is produced, the opportunity cost of producing an additional unit of the other good (food) increases. This reflects the law of increasing opportunity costs, where resources are not perfectly adaptable to the production of both goods.

-The Production Possibilities Frontier in Figure 1