which of the following explains why a production possibilities curve is often represented as concave (bowed…
which of the following explains why a production possibilities curve is often represented as concave (bowed out) from the origin? a the law of demand b the law of supply c constant returns to scale d decreasing opportunity cost e increasing opportunity cost
Answer
Brief Explanations:
The production - possibilities curve is concave from the origin due to the law of increasing opportunity cost. As more of one good is produced, the opportunity cost of producing an additional unit of that good increases. The law of demand and supply relate to market equilibrium of price and quantity, and constant returns to scale and decreasing opportunity cost do not explain the concavity of the production - possibilities curve.
Answer:
E. Increasing opportunity cost