Table 2.1.1
The following table gives points on the production possibilities frontier for goods X and Y.
-The production possibilities frontier corresponding to the data in Table 2.1.1 is
A)negatively sloped and linear.
B)positively sloped and bowed outward.
C)negatively sloped and bowed outward.
D)negatively sloped and bowed inward.
E)positively sloped and linear.

Question

Table 2.1.1
The following table gives points on the production possibilities frontier for goods X and Y. 
-The production possibilities frontier corresponding to the data in Table 2.1.1 is
A)negatively sloped and linear. 
B)positively sloped and bowed outward. 
C)negatively sloped and bowed outward. 
D)negatively sloped and bowed inward. 
E)positively sloped and linear.

Quizplus · Accepted Answer

The production possibilities frontier (PPF) is negatively sloped, indicating that as the production of one good increases, the production of the other good decreases. Additionally, the PPF is bowed outward, indicating that the opportunity cost of producing one good increases as the production of that good increases. This is consistent with the law of diminishing marginal returns, which states that as more resources are devoted to the production of a good, the marginal benefit of the additional resources decreases. Therefore, choice C is the best choice.

Table 2.1.1 The Following Table Gives Points on the Production Possibilities Frontier