Refer to the diagram below.The concave shape of each production possibilities curve indicates that:
A)resources are perfectly substitutable.
B)wants are virtually unlimited.
C)prices are constant.
D)resources are not equally suited for alternative uses.

Question

Refer to the diagram below.The concave shape of each production possibilities curve indicates that: 
A)resources are perfectly substitutable. 
B)wants are virtually unlimited. 
C)prices are constant. 
D)resources are not equally suited for alternative uses.

Quizplus · Accepted Answer

The concave shape of the production possibilities curve indicates that resources are not equally suited for alternative uses. This is because as we move along the curve, more resources must be reallocated from one good to another, which becomes increasingly difficult as resources become more specialized. This leads to increasing opportunity costs and a concave shape to the production possibilities curve. Choices A, B, and C are not directly related to the concave shape of the curve.

Refer to the Diagram Below