The fundamental reason the production possibilities curve has a downward slope is:
A) workers are inefficient.
B) resources are of low quality.
C) resources are fixed and therefore tradeoffs must be made.
D) it has empirical support but why it is so is still a mystery.

Question

Quizplus · Accepted Answer

The production possibilities curve assumes that resources are fixed and limited, meaning that tradeoffs must be made between producing different goods. As more resources are allocated to one good, fewer resources are available to produce the other, leading to a downward slope of the curve. This is a fundamental concept in economics known as scarcity. The other options, such as workers being inefficient or resources being of low quality, may also affect production but are not the primary reason for the downward slope of the curve. The last option is incorrect as the reason for the downward slope is well-established and understood in economics.

The Fundamental Reason the Production Possibilities Curve Has a Downward