If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ?
Correct answer: D. increasing opportunity costs
- A. constant opportunity costs
- B. decreasing opportunity costs
- C. first increasing and then decreasing opportunity costs
- D. increasing opportunity costs
Explanation
A bowed-out PPF reflects increasing opportunity cost: producing additional units of one good requires giving up progressively more of the other good. This occurs because resources are not equally suited to producing both goods.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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