The slope of the production possibilities curve must be
A) constant.
B) positive.
C) decreasing.
D) increasing.
E) negative.

Question

Quizplus · Accepted Answer

The slope of the production possibilities curve represents the opportunity cost of producing one good in terms of the other good. Since resources are scarce, producing more of one good requires giving up some of the other good. As we move along the curve, the quantity of one good produced increases, but the quantity of the other good produced decreases. This means that the opportunity cost of producing the first good increases as we produce more of it, and the slope of the curve becomes steeper (i.e., more negative). Therefore, the correct choice is E - negative.

The Slope of the Production Possibilities Curve Must Be