Economics · International Trade Theories
In international trade theory, a concave (bowed-outward) Production Possibility Frontier (PPF) indicates:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Constant opportunity costs across all production levels, leading to complete specialization.
- 2Increasing opportunity costs, leading to incomplete/partial specialization under free trade.✓
- 3Decreasing opportunity costs, leading to complete specialization in both goods simultaneously.
- 4Zero trade costs and identical technology across countries.
Correct answer
Increasing opportunity costs, leading to incomplete/partial specialization under free trade.
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