Exhibit 2-15 Production possibilities curve

In Exhibit 2-15, the shape of the production possibilities curve demonstrates:

Question

Exhibit 2-15 Production possibilities curve

In Exhibit 2-15, the shape of the production possibilities curve demonstrates:

Quizplus · Accepted Answer

The shape of the production possibilities curve shows the law of increasing opportunity costs, which means that as more of one good is produced, the opportunity cost of producing each additional unit increases. This is demonstrated by the curve bowing outwards. The other options, such as changing prices or decreases in resources, would cause shifts in the production possibilities curve rather than a change in its shape. Economic growth would result in an outward shift of the curve.

Exhibit 2-15 Production Possibilities Curve