Question

The negative slope of the production possibilities frontier represents the idea

• A. that free lunches are possible.
• B. of tradeoffs, that in order to produce more of one good, you must produce less of another.
• C. of unemployment.
• D. of inefficient production.

Hint:

This curve's downward slope illustrates giving up one good to gain more of another.

Answer 1

The Correct Option is B

The Production Possibilities Frontier (PPF) shows the maximum combinations of two goods an economy can produce using its available, fully employed resources and current technology.
Because resources are limited and have to be shifted from producing one good to producing another, the PPF slopes downward: producing more of one good is only possible by giving up some production of the other.
That trade-off, illustrating the concept of opportunity cost, is exactly what option 2 describes.