A Production Possibilities Curve Has a Downward Slope Because

question 180

Multiple Choice

A production possibilities curve has a downward slope because

• A)increased production of one good always reduces the additional profit of production.
• B)decreased production of one good is associated with lower profit from that good.
• C)economists have a negative view of life and human nature.
• D)increased production of one good always reduces production of the other.
• E)increased production of one good necessarily causes production of other goods to increase.

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Definitions:

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.

Quantity Demanded

Quantity demanded refers to the specific amount of goods or services consumers are willing to purchase at a given price point, ceteris paribus (all other factors being equal).

Quantity Demanded

Quantity demanded is the amount of a good or service that consumers are willing and able to purchase at a given price within a specific time frame.

Demand

The total amount of goods or services that consumers are willing and able to purchase at a given price over a specified period of time.