A typical concave (bowed out from the origin) production possibilities curve implies
A) that economic resources are unlimited.
B) that society must choose among various attainable combinations of goods.
C) decreasing opportunity costs.
D) that society is using a market system to allocate resources.

Question

Quizplus · Accepted Answer

A concave production possibilities curve implies that there are increasing opportunity costs as we produce more of one good. This means that society must choose among various attainable combinations of goods as it cannot produce an infinite amount of both goods. Therefore, option B is the best choice. Option A is incorrect because a bowed-out PPF suggests that resources are scarce, not unlimited. Option C is incorrect because a concave PPF implies increasing opportunity costs, not decreasing. Option D is incorrect because the type of resource allocation system being used is not indicated by the shape of the PPF.

A Typical Concave (Bowed Out from the Origin) Production Possibilities