Refer to the accompanying figure. For the nation whose PPC is shown, it must be true that:
A)the nation's productive resources are better-suited to making milk than to making movies.
B)the nation's productive resources are better-suited to making movies than to making milk.
C)some of the nation's productive resources are better-suited to making milk, and some are better-suited to making movies.
D)the nation has a comparative advantage in making milk.

Question

Refer to the accompanying figure. For the nation whose PPC is shown, it must be true that: 
A)the nation's productive resources are better-suited to making milk than to making movies. 
B)the nation's productive resources are better-suited to making movies than to making milk. 
C)some of the nation's productive resources are better-suited to making milk, and some are better-suited to making movies. 
D)the nation has a comparative advantage in making milk.

Quizplus · Accepted Answer

A bow-shaped PPC is consistent with increasing opportunity costs. This type of PPC arises in an economy with productive resources that have different opportunity costs of producing an additional unit of any given good.

Refer to the Accompanying Figure