The production possibilities frontier has a negative slope and illustrates the notion of trade-offs: As more units of one good are produced, fewer resources are left to produce the other good.

Question

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This statement is true. The negative slope of the PPF shows the inverse relationship between the production of two goods. As more of one good is produced, the opportunity cost of producing the other good increases, because resources are limited and must be shifted away from the production of the second good. Therefore, the PPF illustrates the concept of trade-offs.

The Production Possibilities Frontier Has a Negative Slope and Illustrates