If resources are better suited toward the production of one good than toward another good,then the PPF for those two goods is
A) a straight line.
B) bowed outward.
C) upward sloping.
D) any of the above

Question

Quizplus · Accepted Answer

If resources are better suited toward the production of one good than another, the PPF will be bowed outward because the opportunity cost of producing one good will increase as more of it is produced, due to the decreasing marginal productivity of resources in that industry. Therefore, the economy will have to give up increasing amounts of the other good to produce more of the first good, leading to a bowed-out shape of the PPF curve.

If Resources Are Better Suited Toward the Production of One