[amp_mcq option1=”Straight line” option2=”Concave” option3=”Backward leading” option4=”Convex” correct=”option2″]<\/p>\n
The correct answer is B. Concave.<\/p>\n
A production possibility frontier (PPF) is a graph that shows the maximum combinations of two goods that an economy can produce given its limited resources. The PPF is concave if the marginal opportunity cost of producing one good in terms of the other is increasing. This means that the more of one good an economy produces, the more of the other good it has to give up in order to produce the next unit of the first good.<\/p>\n
A straight line PPF would indicate that the marginal opportunity cost of producing one good in terms of the other is constant. This is not realistic, as most economies experience increasing marginal opportunity costs as they produce more of one good.<\/p>\n
A backward-bending PPF would indicate that the marginal opportunity cost of producing one good in terms of the other is decreasing. This is also not realistic, as most economies experience increasing marginal opportunity costs as they produce more of one good.<\/p>\n
A convex PPF would indicate that the marginal opportunity cost of producing one good in terms of the other is decreasing at first, but then increases. This is not a common shape for a PPF, but it is possible in some cases.<\/p>\n
In conclusion, the correct answer is B. Concave.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Straight line” option2=”Concave” option3=”Backward leading” option4=”Convex” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-51284","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n