Cameroon GCE O-Level Economics Practice Questions - Cameroon General Certificate Of Education Ordinary Level - Economics (Subject Code 0525) Exam

Why is a typical Production Possibility Frontier (PPF) bowed outwards (concave to the origin)?

Because economic resources are perfectly adaptable between different industries Because resources are not perfectly substitutable, leading to increasing opportunity costs Because the government imposes progressive taxes on manufacturing industries Because consumer demand remains perfectly inelastic at all price levels

Correct Answer:

Because resources are not perfectly substitutable, leading to increasing opportunity costs

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