Question

The reason the production possibilities curve is bowed outward (concave) is

a. that the economy has more capital goods than entrepreneurial effort.
b. that the number of resources is increasing.
c. that technology is constantly changing.
d. the law of increasing additional cost.

Answer 1

Answer:

d. the law of increasing additional cost.

Explanation:

Production possibility curve is a graphical representation comparing combination of two products that can be produced with a given level of resources.

The production possibility curve curves outward because of the law of increasing additional cost that states: that once the factors of production (land, capita, and labor) are being used at maximum, any additional production will cost more.