Which of the following give the bowed-outward shape to the PPF? Choose one or more:

A. the concept of ceteris paribus

B. the law of increasing opportunity cost

C. the law of increasing specialization

D. the law of decreasing opportunity cost

Question

Business

Lindsay Rivera

10 February, 01:02

Which of the following give the bowed-outward shape to the PPF? Choose one or more:

A. the concept of ceteris paribus

B. the law of increasing opportunity cost

C. the law of increasing specialization

D. the law of decreasing opportunity cost

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Answers (1)

Know the Answer?

Selena Howell · Answer 1

B. the law of increasing opportunity cost

Explanation:

PPF is graphical representation of product combinations that an economy can produce, given resources & technology

It is downward sloping because - given same resources & technology, one good 's production can be increased by decreasing production of other good.

Resources are assumed to be unequally efficient in production of resources. Shifting production from one good to other occurs with increasing Marginal Opportunity Cost (amount of good sacrifised to gain an additional unit of the other good.

This makes slope of PPC i, e MOC to rise & makes it concave i. e outward bending

Which of the following give the bowed-outward shape to the PPF? Choose one or more:A. the concept of ceteris paribusB. the law of increasing opportunity costC. the law of increasing specializationD. the law of decreasing opportunity cost

Which of the following give the bowed-outward shape to the PPF? Choose one or more:

A. the concept of ceteris paribus

B. the law of increasing opportunity cost

C. the law of increasing specialization

D. the law of decreasing opportunity cost