PRC-3 · Chapter 9 · Question 7 of 45
The typical curvature (bowed-out shape) of a standard Production Possibility Frontier (PPF) is primarily caused by which economic principle?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Increasing opportunity cost
Explanation
The PPF is bowed outward because resources are not perfectly adaptable to the production of all goods. As you shift resources from one good to another, you face increasing opportunity costs.
More Nature and Scope of Economics MCQs
- Q9A government increases taxes heavily and reduces its own spending. How will this combined action affect the circular flow of national…
- Q10Which of the following statements best defines Lionel Robbins' renowned scarcity definition of economics?
- Q11A country relies completely on the price mechanism and the free decisions of buyers and sellers to answer the basic economic questions of…
- Q12In the study of economics, the terms 'Land, Labor, Capital, and Enterprise' are collectively known as:
- Q13A brilliant high school graduate is accepted into a top university. However, she considers taking a full-time job that pays Rs. 50,000 per…