A production possibilities curve that is bowed out represents the case of
A)constant costs.
B)increasing costs.
C)decreasing costs.
D)internal costs.
E)external costs.

Question

Quizplus · Accepted Answer

A bowed-out production possibilities curve represents increasing costs. This means that as more of one good is produced, the opportunity cost of producing additional units of that good increases, leading to a convex curve. This can be due to factors such as limited resources, specialized equipment, or diminishing returns in production.

A Production Possibilities Curve That Is Bowed Out Represents the Case