Asked by David Adamovich on Jun 09, 2024
Verified
The production possibilities curve has:
A) a positive slope that increases as we move along it from left to right.
B) a negative slope that increases as we move along it from left to right.
C) a negative slope that decreases as we move along it from left to right.
D) a negative slope that is constant as we move along it from left to right.
Production Possibilities Curve
A graphical representation that shows the maximum amount of two goods that can be produced with available resources and technology.
Negative Slope
indicates a relationship in a graph where as one variable increases, the other variable decreases, showing an inverse correlation.
- Explain how the law of increasing opportunity costs is represented by the production possibilities curve's shape.
Verified Answer
DE
David EdwardsJun 14, 2024
Final Answer :
B
Explanation :
The production possibilities curve typically has a negative slope, reflecting the trade-off between producing one good versus another. As resources are finite, producing more of one good means producing less of another, hence the negative slope. The slope increases (in absolute value) from left to right due to increasing opportunity costs.
Learning Objectives
- Explain how the law of increasing opportunity costs is represented by the production possibilities curve's shape.