Question

Unlike in the case of constant costs, increasing-cost conditions correspond to a ________________ production possibilities frontier (PPF). This indicates that the marginal rate of transformation __________ in response to movements along the PPF.

Answer 1

Answer:

bowed-out, varies

Explanation:

• The downwards pointing of the slope of the production curve is an implication of scarcity and this shape is a result of the allocation of the resources that are based on the comparative advantage and such as an allocation implies the opportunity costs with the holders.

• The rate of the transformation can be explained as many units of goods have been produced in order to make an extra unit of a good and it varies in the movement along the PPF curve.