Question

question 3 · 1 point
a production possibilities frontier (ppf) ______.
select all that apply.

• illustrates the limits to the quantities of goods and services a society can produce
• is downward-sloping from right to left
• is bowed out from the origin because of diminishing marginal returns
• is bowed out from the origin because of increasing marginal returns

Explanation:

1. For the first option: The Production Possibilities Frontier (PPF) shows the maximum combinations of goods and services a society can produce with its available resources and technology, so it illustrates the limits to production. This is correct.
2. For the second option: The PPF is downward - sloping (from left to right, representing the trade - off between two goods), not from right to left. So this is incorrect.
3. For the third option: The PPF is bowed out from the origin due to the law of diminishing marginal returns. As we reallocate resources from producing one good to another, the marginal cost of producing the second good increases, which causes the PPF to be bowed out. This is correct.
4. For the fourth option: The PPF is bowed out because of diminishing marginal returns (not increasing). Increasing marginal returns would make the PPF bowed in, which is not the case. So this is incorrect.

Answer:

• $\square$ illustrates the limits to the quantities of goods and services a society can produce (correct)
• $\square$ is downward - sloping from right to left (incorrect)
• $\square$ is bowed out from the origin because of diminishing marginal returns (correct)
• $\square$ is bowed out from the origin because of increasing marginal returns (incorrect)

The correct options are the first and the third ones (the boxes corresponding to "illustrates the limits to the quantities of goods and services a society can produce" and "is bowed out from the origin because of diminishing marginal returns").