A production possibilities curve has a downward slope because
A)increased production of one good always reduces the additional profit of production.
B)decreased production of one good is associated with lower profit from that good.
C)economists have a negative view of life and human nature.
D)increased production of one good always reduces production of the other.
E)increased production of one good necessarily causes production of other goods to increase.

Question

Quizplus · Accepted Answer

A production possibilities curve represents the maximum amount of two goods that can be produced with given resources and technology. As resources are shifted from the production of one good to another, the maximum quantity of the first good that can be produced decreases, causing a decrease in its production. Hence, increased production of one good always reduces production of the other and the curve slopes downward.

A Production Possibilities Curve Has a Downward Slope Because