Relative to a linear production possibilities curve,one that is more concave to the origin indicates a(n):
A)greater resource availability.
B)reduced resource availability.
C)decreasing opportunity cost of specializing in production.
D)increasing opportunity cost of specializing in production.

Question

Quizplus · Accepted Answer

A production possibilities curve that is more concave to the origin indicates increasing opportunity cost of specializing in production. This is because as more of one good is produced, increasing amounts of the other good must be given up in order to do so. This reflects the reality of diminishing returns to production. Thus, as more resources are allocated to one good, the opportunity cost of producing additional units of that good increases, leading to a more concave production possibilities curve.

Relative to a Linear Production Possibilities Curve,one That Is More