When a nation has increasing returns to scale,the shape of its production possibility frontier is

Question

Quizplus · Accepted Answer

When a nation has increasing returns to scale, it means that if it increases all of its inputs by a certain percentage, the output will increase by a higher percentage. This leads to the shape of the production possibility frontier being convex to the origin. This is because as more resources are used, the marginal product of each additional unit of input increases, resulting in an increasing slope of the production possibility curve. Therefore, choice C is the best answer.

When a Nation Has Increasing Returns to Scale,the Shape of Its