Question

PPC shows an increasing slope.

• A. True
• B. False

Answer 1

The correct option is A True

The slope of production possibility curve shows the marginal opportunity cost which refers to the additional sacrifice that an economy must make when they shift resources and technology from production of one commodity to the other. Since resources are use specific, therefore, each time when one more unit of a commodity is produced a larger quantity of the other commodity is required to be sacrificed. This results in increasing marginal opportunity cost., which is denoted by the slope of the PPC.