A PPF bows outward because
A) resources are used inefficiently.
B) not all resources are equally productive in all activities.
C) consumers prefer about equal amounts of the different goods.
D) entrepreneurial talent is more abundant than human capital.

Question

Quizplus · Accepted Answer

The Production Possibility Frontier (PPF) bows outward because not all resources are equally productive in all activities, which means that as the production of one good increases, more and more of the other good must be given up due to the increasing opportunity cost. This reflects the law of increasing opportunity costs.

A PPF Bows Outward Because