Why does the production possibility frontier have a negative slope?
What will be an ideal response?
Because of scarce resources, increasing the production of one good or service implies that the production of the other good or service must be reduced. Thus, there is a negative relationship between the two goods and the production possibility frontier is downward sloping.
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The MPC shows the relationship between:
a. interest rates and investment. b. disposable income and consumer spending. c. saving and investing. d. inflation and unemployment
A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is
A) an intermediate good. B) part of net exports if the fish was caught beyond the U.S. border. C) an investment. D) an example of government expenditures on goods and services. E) a consumption expenditure.