If increasingly more units of good Y must be given up as each successive unit of good X is produced,then the PPF for these two goods is
A) a downward-sloping straight line.
B) circular.
C) an upward-sloping curve.
D) a downward-sloping curve that is bowed outward.
E) a downward-sloping curve that is bowed inward.

Question

Quizplus · Accepted Answer

If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is a downward-sloping curve. This is because as the production of one good increases, the opportunity cost of producing the other good increases, which means more and more units of the other good must be given up to produce an additional unit of the first good. The PPF will be bowed outward because the opportunity cost is not constant, but increasing as we move along the curve.

If Increasingly More Units of Good Y Must Be Given