The Production Possibilities Frontier Has a Negative Slope and Illustrates

question 72

True/False

The production possibilities frontier has a negative slope and illustrates the notion of trade-offs: As more units of one good are produced, fewer resources are left to produce the other good.

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Definitions:

Farmland

Land used for farming and agricultural production.

Economic Rent

Extra income earned by a factor of production due to its scarcity or unique qualities, above what is necessary to bring it into use.

Upward Sloping

A graphical depiction indicating that as one variable increases, another variable also increases, commonly used in supply curves.

Equilibrium Price

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.