The fact that resources are not equally productive in all activities
A)implies that gains from specialization and trade are unlikely.
B)implies a linear production possibilities frontier.
C)follows from the law of demand.
D)implies that an economy should not produce certain goods.
E)implies that a production possibilities frontier will be bowed outward.

Question

Quizplus · Accepted Answer

The fact that resources are not equally productive in all activities implies that the production possibilities frontier will be bowed outward. This is because as production increases, resources must be shifted from activities where they are more productive to activities where they are less productive, thus causing increasing opportunity costs and a bowed-out shape of the PPF. The other options are incorrect.

The Fact That Resources Are Not Equally Productive in All