The bowed-out shape of a production possibilities curve illustrates
A) insufficient resources to produce the country's basic needs
B) free trade with a neighboring country
C) increasing opportunity costs
D) how an economy grows when resources are added

Question

Quizplus · Accepted Answer

The bowed-out shape of a production possibilities curve illustrates increasing opportunity costs, meaning that as production of one good increases, the opportunity cost of producing an additional unit of the other good increases. This is because resources are not perfectly adaptable to the production of all goods.

The Bowed-Out Shape of a Production Possibilities Curve Illustrates