When there are diminishing returns to labor, the
Production possibility frontier is _______ sloping and
________ to the origin.
A)downward; convex
B)downward; concave
C)upward; concave
D)upward; convex

Question

Quizplus · Accepted Answer

When there are diminishing returns to labor, the production possibility frontier is downward sloping because as more and more labor is added, the marginal product of labor declines. This also causes the frontier to be concave to the origin because the decrease in marginal product becomes more and more rapid as more labor is added, resulting in a bow-shaped curve.

When There Are Diminishing Returns to Labor, the