The Production Possibilities Curve for Two Products Is Bowed Out

question 8

Multiple Choice

The production possibilities curve for two products is bowed out because

• A) as the production of a good increases, opportunity cost increases.
• B) as the production of a good increases, opportunity cost is unchanged.
• C) the qualities of the resources are not identical.
• D) there are unemployed resources.

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Definitions:

Perfect Competition

a market structure characterized by a large number of small firms, producing identical products, with no single firm able to influence the market price.

Price Takers

Firms or individuals in a market who accept the prevailing prices as they cannot influence them due to their small market share in highly competitive markets.

Identical Products

Products that are the same in every aspect, often referred to in economics to describe goods that have no differentiation in the eyes of consumers.

ATC

ATC can refer to Air Traffic Control, a service provided to ensure the safe, orderly, and expeditious flow of air traffic in the sky and at airports.