Final answer:
The law of diminishing returns leads to a total product curve that increases at a decreasing rate (Option B), not an indefinitely rising one. Option B.is the correct answer.
Step-by-step explanation:
The law of diminishing returns implies that as additional units of resources are allocated to a production process, the incremental gains from each additional unit will eventually decline. This means that the marginal product curve will eventually increase at a decreasing rate.
The correct answer to the question is that the law of diminishing returns results in B) a total product curve that eventually increases at a decreasing rate. This is due to the fact that after a certain point, adding more resources results in less proportional increase in output, leading to a flattening of the production curve.
The concept of the production possibilities frontier (PPF) demonstrates productive efficiency, showing that it is not possible to increase the production of one good without decreasing another when all resources are efficiently utilized. Allocative efficiency, on the other hand, is reached when the mix of goods being produced represents the preference of society. Trade based on comparative advantage can lead to an increase in total production.