The law of increasing costs causes the production possibilities curve to be bowed outward from the origin.

Question

Quizplus · Accepted Answer

The law of increasing costs states that as production of one good increases, the opportunity cost of producing an additional unit of this good increases, which results in the production possibilities curve being bowed outward from the origin. This shape reflects the increasing cost of producing more of one good at the expense of another.

The Law of Increasing Costs Causes the Production Possibilities Curve