A bowed out PPF reflects which of the following ideas?
i.Increasing opportunity cost
ii.Resources are not equally productive in all activities.
iii.Prices of goods increase over time.
A) i only
B) i and ii
C) i and iii
D) ii and iii
E) i, ii, and iii

Question

Quizplus · Accepted Answer

A bowed out PPF (Production Possibility Frontier) reflects the idea of increasing opportunity cost, as the production of one good can only be increased by giving up increasing amounts of the other good. It also reflects the idea that resources are not equally productive in all activities, as the PPF is curved rather than straight. It does not necessarily reflect the idea that prices of goods increase over time.

A Bowed Out PPF Reflects Which of the Following Ideas