PRC-3 · Chapter 9 · Question 33 of 45
Why does a typical Production Possibility Frontier (PPF) bow outward (concave to the origin) instead of being a straight line?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Because of the law of increasing opportunity cost
Explanation
The PPF is bowed outward because resources are specialized. As you shift production from one good to another, you have to use less efficient resources, increasing the opportunity cost.
More Nature and Scope of Economics MCQs
- Q35In a purely Command Economy, the fundamental economic questions of 'what to produce', 'how to produce', and 'for whom to produce' are…
- Q36The complex process of converting physical resources and raw materials into finished goods is the responsibility of which organizational…
- Q37Which term describes a manufacturing system that deliberately produces goods one at a time exactly according to the specific needs or…
- Q38In 'process manufacturing', the basic inputs (like chemicals or minerals) are physically or chemically converted into one or more…
- Q39Which of the following is typically NOT a primary geographic factor for selecting a suitable location for a new manufacturing facility?