Practice question · Multiple choice
A PPF is drawn bowed outward rather than as a straight line. What real fact about resources does the curvature encode?
Hints
- Which farmland do you convert to factories first? Which last?
- Ask what a straight-line frontier would be claiming about workers and land.
Show the answer
A. Resources are not equally suited to both goods
Why
You convert the worst farmland first and the best last, so each extra factory costs more bushels than the one before, the slope steepening is that fact drawn. A straight line would claim every worker and every hectare is equally good at both jobs, which is exactly what specialisation denies.
Practise The Production Possibilities Frontier
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