If the production possibilities curve in France is bowed out and the curve in Spain is a straight line, then we know that

Question

Quizplus · Accepted Answer

The bowed-out shape of France's production possibilities curve indicates increasing opportunity costs as production shifts between goods, which is a reflection of the law of increasing costs. Spain's straight-line curve suggests constant opportunity costs for producing different goods, meaning the law of increasing costs does not apply to Spain.

If the Production Possibilities Curve in France Is Bowed Out