Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow. Figure 2.1
-Refer to Figure 2.1. Macroland's production possibility frontier is bowed out from the origin due to
A) decreasing opportunity costs.
B) trade.
C) unemployment.
D) specialized resources.

Question

Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow.  Figure 2.1
-Refer to Figure 2.1. Macroland's production possibility frontier is bowed out from the origin due to
A) decreasing opportunity costs. 
B) trade. 
C) unemployment. 
D) specialized resources.

Quizplus · Accepted Answer

The production possibility frontier (PPF) is bowed out from the origin due to specialized resources, which leads to increasing opportunity costs as production shifts from one good to another. This shape reflects the reality that not all resources are equally efficient in all activities, so reallocating resources to different uses involves trade-offs that become more costly.

Refer to the Information Provided in Figure 2