Print Calculator Question 2 of 10 Map do Sapling Learning Why is the shape of th

Question

Print Calculator Question 2 of 10 Map do Sapling Learning Why is the shape of the production possibilities frontier (PPF) often curved instead of straight? Typically, some resources are better suited for producing one good than another which means that there are diminishing returns when moving such resources away from producing what they are best suited for. To take a potential sunk cost into account, the PPF is curved to distribute the burden of the sunk cost based on allocative effieciency The productive efficiency of an economy decreases as it moves from left to right along the PPF O Because the production possibilities frontier is based on the productive capabilites and of a nation overall rather than the productive capacity of an individual.

Explanation / Answer

Option (1) is correct.

The curved shape of PPF is explained by resource suitability and diminishing returns to resources.

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