Multiple choice

If marginal opportunity cost is falling, the PPF would be a

  1. straight line

  2. concave

  3. backward bending

  4. convex
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When marginal opportunity cost is falling, the production possibility frontier becomes convex to the origin (bowed inward). This indicates increasing returns - each additional unit produced requires giving up less of the other good.

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