The more realistic PPF of health is an upwardsloping line al
The more realistic PPF of health
is an upward-sloping line all the way
is an downward-sloping line all the way
starts with a downward-sloping line and switches to an upward-sloping line
starts with an upward-sloping line and switches to a downward-sloping line
| a. | is an upward-sloping line all the way | |
| b. | is an downward-sloping line all the way | |
| c. | starts with a downward-sloping line and switches to an upward-sloping line | |
| d. | starts with an upward-sloping line and switches to a downward-sloping line |
Solution
The more realistic PPF of health is a downward-sloping line all the way as Hospital is a service industry.
Imagine a downward sloping curve with Medical Service on X axis and Other Goods Industry on Y axis. As you start moving from top point of the curve (that touches Y axis), you start sacrificing resources from other goods industry. That creates an opportunity cost which gives this downward shape to the curve.
Initially when you start moving along the curve, you produce more medical services with less effect on other goods some resources. This is due to the fact that some resources were not suited for other Goods and when they were forced to produce other goods they did not have that much of an effect. Taking these resources away from other good industry did not affect the production of other goods that much, but enhanced medical services a lot because they are much better suited to produce medical care. A hospital would not make a good factory.
