The Reason That the Production Possibilities Curve Is Usually a Bow-Shaped

question 73

Multiple Choice

The reason that the production possibilities curve is usually a bow-shaped curve instead of a straight line is that

• A) it makes it easier to illustrate the concepts of scarcity and prices with a bow-shaped curve than it is with a straight line
• B) early economists began drawing them in this way and the convention has continued throughout the years
• C) output eventually reaches a maximum and then declines
• D) resources are not perfectly adaptable to the production of all goods

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Definitions:

Depreciation

The process of spreading the costs of long-lived assets such as buildings and equipment over the total number of accounting periods in which they are expected to be used.