A PPF bows outward because
A) not all resources are equally productive in all activities.
B) consumers prefer about equal amounts of the different goods.
C) entrepreneurial talent is more abundant than human capital.
D) resources are used inefficiently.

Question

Quizplus · Accepted Answer

A PPF (Production Possibilities Frontier) bows outward because not all resources are equally productive in all activities, which means that as the production of one good increases, increasingly larger amounts of the other good must be sacrificed. This reflects the law of increasing opportunity costs.

A PPF Bows Outward Because