When there are diminishing returns to labor, the production possibility frontier is _______ sloping and ________.
A) downward; convex (bowed in toward the origin)
B) downward; concave (bowed out from the origin)
C) upward; concave (bowed out from the origin)
D) upward; convex (bowed in toward the origin)

Question

Quizplus · Accepted Answer

When there are diminishing returns to labor, the production possibility frontier is downward sloping and concave (bowed out from the origin). This is because as more labor is added, the increase in output becomes smaller and smaller, leading to a curved shape for the curve. Option A is incorrect because a downward sloping curve cannot be convex. Option C and D are both incorrect because they describe a scenario where there are increasing returns to labor, not diminishing returns.

When There Are Diminishing Returns to Labor, the Production Possibility