The production possibilities frontier bows outward because
A) opportunity costs are decreasing as the production of a good increases.
B) opportunity costs are increasing as the production of a good increases.
C) opportunity costs are fixed as the production of a good increases.
D) resources are of uniform quality.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) bows outward because opportunity costs increase as the production of one good increases. This is due to the law of increasing opportunity costs, which states that to produce more of one good, a larger amount of the other good must be sacrificed, leading to higher opportunity costs. This happens because resources are not perfectly adaptable to the production of all goods.

The Production Possibilities Frontier Bows Outward Because