In General, Production Possibilities Curves Are "Bowed Out" Because

question 12

Multiple Choice

In general, production possibilities curves are "bowed out" because:

• A)it's wasteful to produce too much of any one good.
• B)people generally prefer to consume goods in appropriate combinations.
• C)of the law of increasing opportunity cost.
• D)of the law of demand.

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Definitions:

User Cost

The cost of using a durable good over time, considering depreciation and the opportunity cost of not investing funds elsewhere.

Economic Depreciation

A measure of the decrease in value of an asset over time due to use, wear and tear, and obsolescence.

Marginal Product

The increase in output that arises from an additional unit of input, holding all other inputs constant.

Labor

The human effort, both physical and mental, used in the production of goods and services.