The shape of the production possibilities frontier in Figure 3-1 implies that
A) some resources are better suited for producing wheat than for producing barley.
B) the opportunity cost of producing more wheat falls as wheat production rises.
C) the farmer's technology is not subject to the principle of increasing costs.
D) the financial cost of producing wheat is higher than the financial cost of producing barley.

Question

Quizplus · Accepted Answer

The shape of the production possibilities frontier (PPF) typically reflects the principle of increasing opportunity costs, which implies that some resources are better suited for producing one good over another. Hence, as more of one good is produced, the opportunity cost of producing additional units increases, indicating that some resources are better suited for producing wheat than barley.

The Shape of the Production Possibilities Frontier in Figure 3-1