A PPF Is More Likely to Be a Downward-Sloping Curve

question 2

Multiple Choice

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

• A) better suited for the production of some goods than others.
• B) used efficiently.
• C) relatively cheap at low levels of output.
• D) used to produce consumption goods.

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Definitions:

Profit Maximization

The approach a business takes to determine the pricing and output that lead to the utmost profit.

Production Function

Describes the technological relationship between the quantity of inputs used and the quantity of output produced.

Production Function

An equation that describes the maximum amount of output that can be produced with a given set of inputs.

Profit Maximization

A strategy employed by businesses to find the price and production levels that maximize profits.