If a production possibilities boundary is a curve concave to the origin and not a straight line,then:
A) resources are equally suited to producing alternative products.
B) resources are not equally suited to producing alternative products.
C) resources are perfectly interchangeable to alternative uses.
D) there are unemployed resources.

Question

Quizplus · Accepted Answer

A concave PPF represents the concept of increasing opportunity cost, meaning that the resources are not equally efficient in producing alternative products. As more of one good is produced, increasingly greater amounts of the other good must be given up, reflecting a higher opportunity cost. This indicates that some resources are more suited for producing one good, while others are more suited for producing another.

If a Production Possibilities Boundary Is a Curve Concave to the Origin