The negative slope of the production possibilities curve is a graphical way of indicating that
A) any economy "can have its cake and eat it too."
B) to produce more of one product, we must do with less of another.
C) the principle of increasing opportunity costs applies to only parts of the economy.
D) consumers buy more when prices are low than when prices are high.

Question

Quizplus · Accepted Answer

The negative slope of the production possibilities curve indicates that to produce more of one product, we must do with less of another. This is the principle of increasing opportunity cost, which means that as we produce more of a good, the opportunity cost of producing an additional unit of that good increases. As a result, the production possibilities curve curves inward, representing the tradeoff between the two goods. Therefore, choice B is the correct answer.

The Negative Slope of the Production Possibilities Curve Is a Graphical