How does an economy represented by a straight-line production possibilities curve differ from one represented by a traditional production possibilities curve with a bowed shape?

Question

Quizplus · Accepted Answer

In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. This means that the opportunity cost of producing one good over the other is constant and does not increase as more of that good is produced. In contrast, in an economy represented by a traditional production possibilities curve with a bowed shape, the law of increasing relative cost applies, meaning that as more of one good is produced, the opportunity cost of producing an additional unit of that good increases, resulting in a bowed shape of the production possibilities curve. Therefore, the straight-line production possibilities curve economy differs from the traditional production possibilities curve economy in terms of the application of the law of increasing relative cost.

How Does an Economy Represented by a Straight-Line Production Possibilities