Question

A production possibilities frontier that is a straight line shows a a truer picture of the real world than does a bowed-out production possibilities frontier. b that resources can be shifted easily and seamlessly from the production of one good to the production of a different good. c that the opportunity cost of one good in terms of another good depends on the quantities of the two goods that the economy is producing. d All of the above are correct

Answer 1

Answer:

B.

Explanation:

The production possibilities curve shows the trade off, where the more of them of one item toy choose to produce means a corresponding decrease in the other item.

The curve represents the maximum productivity of two different items.

The curve also shows that the trade off may not be a 1 to 1 ratio. At each end, it only takes a small diversion of resources to produce a large quantity of the other item.

All points in the curve are possible and equally efficient in production. The points outside of the curve are impossible with own production. The points inside the curve are inefficient.