Question

If there is no input specialization, then the production possibilities frontier between good A and good B is bowed in toward the origin. the opportunity cost of producing good A will fall as more of good A and less of good B are produced. the production possibilities frontier between good A and good B is a straight line. the production possibilities frontier between good A and good B is bowed out from the origin.

Answer 1

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The correct answer is (d) the production possibilities frontier between good A and good B is bowed out from the origin.

If there is no input specialization, then the production possibilities frontier (PPF) between good A and good B is bowed out from the origin. This is because resources are not equally efficient in the production of both goods. As more of one good is produced, the opportunity cost of producing that good increases, and the PPF becomes steeper. This results in a bowed-out shape of the PPF.

The opportunity cost of producing good A will rise as more of good A and less of good B are produced, not fall as stated in option (b). Option (a) is incorrect because the PPF is bowed out, not bowed in. Option (c) is incorrect because the PPF is not a straight line, but rather a curved line.