Refer to the diagram below.The concave shape of each production possibilities curve indicates that:
A) resources are perfectly substitutable.
B) wants are virtually unlimited.
C) prices are constant.
D) resources are not equally suited for alternative uses.

Question

Refer to the diagram below.The concave shape of each production possibilities curve indicates that: 
A) resources are perfectly substitutable. 
B) wants are virtually unlimited. 
C) prices are constant. 
D) resources are not equally suited for alternative uses.

Quizplus · Accepted Answer

The concave shape of the production possibilities curve indicates that resources are not equally suited for alternative uses. This means that if all resources are used to produce one good, there will be a higher opportunity cost of producing the other good. As more and more of that good is produced, the opportunity cost of producing the other good increases. Therefore, the shape of the curve is concave.

Refer to the Diagram Below