A bowed outward production possibilities curve occurs when

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A bowed outward production possibilities curve occurs when there is increasing opportunity cost. This means that to produce more of one good, we have to give up more and more of the other good. This typically occurs because not all resources are equally good at producing both goods, and as we shift more and more resources towards one good, we start using resources that are not as well suited to its production, which leads to diminishing returns and increasing opportunity cost.

A Bowed Outward Production Possibilities Curve Occurs When