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The bowed out shape of the production possibility curve is because certain factors of production are better suited to producing one good than they are to producing another good.
For example, if the two goods are food and clothes, then in order to produce more and more clothes, eventually the most productive farmland must be allocated to clothes production. As a result, the opportunity cost of producing ever-larger quantities of clothes rises as more clothes are produced.
So at first when reallocating the resources to produce more clothes, the unfertailed land will be sacrificed, this land may just produce 40 units of food, so the opportunity cost for producing cloths will be low, but then, as the state will reallocate more resources to produce clothes, the most fertailed land will be sacrificed, which may produce 100 units of food, this will raise the opportunity cost for each unit of cloth being produced.
Wiki User
∙ 11y ago
Wiki User
∙ 15y agoThe resources are not perfectly adaptable to different uses.
Wiki User
∙ 13y agoBecause when one produces one product, the opportunity cost of the other product increases i.e. the concave represents the increasing opportunity cost with the production of a good.
Wiki User
∙ 11y agoOpportunity costs are increasing.
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A production possibilities frontier with a bowed outward shape indicates?
A production possibilities frontier with a bowed outward shape indicates an increase in opportunity costs as more and more of one good is produced. Some resources are more specialized towards specific tasks.
Under what conditions is the production possibilities frontier linear rather than bowed out?
When the Opportunity Cost or the tradeoff between the two goods is always at a constant rate.
When the production possibilities curve is bowed out resources are?
Resources are not perfectly shiftable between production of the two goods.
What is the most common shape of a production possibility frontier curve?
It is typically a bowed-out shaped.
Why is the PPF typically bowed outward?
When the PPF graph bows outward it usually means that, as the production of one good continues to grow, the opportunity cost of producing another good increases
A production possibilities frontier with a bowed outward shape indicates?
A production possibilities frontier with a bowed outward shape indicates an increase in opportunity costs as more and more of one good is produced. Some resources are more specialized towards specific tasks.
Why is A nation's production possibilities curve is bowed out from the origin?
When there are diminishing marginal returns to factors of production, the PPF is "bowed out" from the origin.
Under what conditions is the production possibilities frontier linear rather than bowed out?
When the Opportunity Cost or the tradeoff between the two goods is always at a constant rate.
Why does a production possibilities curve have a bowed-out shape?
The PPF is bowed outwards (concave to the origin) as tradeoffs between the production of any two goods are constant.
When the production possibilities curve is bowed out resources are?
Resources are not perfectly shiftable between production of the two goods.
What is the most common shape of a production possibility frontier curve?
It is typically a bowed-out shaped.
Why is the PPF typically bowed outward?
When the PPF graph bows outward it usually means that, as the production of one good continues to grow, the opportunity cost of producing another good increases
Identify 3 different shapes of PPF?
A Production Possibility Frontier (PPF) is a curved bowed out from the origin. It is mostly 2 dimensional and involving 2 goods or services.
Why the production possibilities frontier almost has bowed-out shape?
The shape of the PPF has to do with how many units of good A you have to give up to get another unit of good B It is related to how those goods are different in the types and amounts of productive resources between the two goods. The PPF is straight when you have to give up one unit of good A to get another unit of good B.
How does the Production Possibility Frontier illustrate scarcity?
Scarcity, on a PPC (PPF) is implied by the bowed (concave-down) shape of the curve, since there is a restriction on how much can be produced and, to get more of something, one must give away something else.
Why is ppc bowed out?
hey-- its the law of increasing costs. as you make one thing, your opportunity cost increases because you cannot make the other. therefore, the more of one thing you make, the larger the cost will be because you cannot make the other. therefore, the shape of the production possibilities curve is bowed out.
What does law of increasing opportunity cost express?
The law of increasing opportunity costs states that as production of a product increases, the cost to produce an additional unit of that product increases as well. This law is responsible for the bowed shape of the production possibilities curve. Because not all of our economy's resources are equally well-suited to the production of a single good, the increasing opportunity cost is present.
