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Homework answers / question archive / In the specific factors model, a country's production possibility frontier is because of A a straight line; diminishing marginal returns B a curved line; diminishing marginal returns C a straight line; constant marginal returns D a curved line; constant marginal returns E a curved line; a limited supply of labor
In the specific factors model, a country's production possibility frontier is because of A a straight line; diminishing marginal returns B a curved line; diminishing marginal returns C a straight line; constant marginal returns D a curved line; constant marginal returns E a curved line; a limited supply of labor
The correct option is B- a curved line; diminishing marginal returns.
In the specific factors model, we assume that the economy produces two goods using two input factors. As the economy produces more of one good, it sacrifices more and more of a second good- hence diminishing marginal returns which result in a curved line of a production possibility frontier.
