The concave,or bowed-out,shape of the production possibilities curve illustrates the law of increasing opportunity costs.

Question

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The concave shape of the production possibilities curve signifies that as we produce more of one good, the opportunity cost of producing additional units of that good increases. This is because resources are not equally efficient in producing different goods, and as we allocate more resources to one good, we have to take them away from other goods that they are relatively more efficient at producing. Therefore, the law of increasing opportunity costs is represented by the bowed-out shape of the production possibilities curve.

The Concave,or Bowed-Out,shape of the Production Possibilities Curve Illustrates the Law