If a production possibilities frontier is bowed out (concave to the origin),then production occurs under conditions of
A) constant opportunity costs.
B) increasing opportunity costs.
C) decreasing opportunity costs.
D) infinite opportunity costs.
E) uncertain opportunity costs.

Question

Quizplus · Accepted Answer

A bowed-out production possibilities frontier indicates increasing opportunity costs, meaning that as the production of one good increases, the opportunity cost of producing an additional unit of that good increases, leading to a bowed-out shape. This occurs due to the fact that resources are not equally efficient in the production of both goods, and as more resources are allocated towards the production of one good, they become less suited for the production of the other good.

If a Production Possibilities Frontier Is Bowed Out (Concave to the Origin),then