A production possibilities curve always slopes downward to the right because resources
A)are not scarce.
B)have no opportunity cost.
C)are freely available.
D)are limited.
E)are not related to outputs.

Question

Quizplus · Accepted Answer

A production possibilities curve shows the maximum combinations of two goods that can be produced with a given set of resources. The slope of the curve is downward because resources are limited and each possible combination involves a trade-off or opportunity cost, with the opportunity cost increasing as more of one good is produced. If resources were unlimited, the curve would be a straight line, not a curve. Therefore, the correct answer is D, resources are limited.

A Production Possibilities Curve Always Slopes Downward to the Right