Which of the following causes the production possibilities frontier to have a bowed out, curvilinear shape?
A) The assumption that resources are not specialized and so are equally productive in all activities
B) The assumption that resources are specialized and so are not equally productive in all activities
C) The point that moving along the PPF technology is held constant
D) The scarcity of resources

Question

Quizplus · Accepted Answer

The assumption that resources are specialized and so are not equally productive in all activities causes the production possibilities frontier to have a bowed out, curvilinear shape. This is because as the economy produces more of a particular good, it has to give up increasingly larger amounts of other goods, and the opportunity cost of production increases. As a result, the PPF is bowed out or curved, reflecting the diminishing marginal rate of transformation between goods.

Which of the Following Causes the Production Possibilities Frontier to Have