Final answer:
The PPF is concave to the origin due to the Law of Diminishing Returns, which reflects increasing opportunity costs when reallocating resources between different goods, such as healthcare and education.
Step-by-step explanation:
The Production Possibilities Frontier (PPF) is concave to the origin because of the Law of Diminishing Returns. As resources are reallocated from healthcare to education, the last units of resources devoted to healthcare yield less additional benefit, while those same units can produce comparatively greater gains in education when no resources were previously allocated to it. This trade-off causes the PPF to bow outward, illustrating a greater opportunity cost in producing one additional unit of a good as resources become increasingly specialized.
At the extremes, such as point A on the PPF where all resources are dedicated to healthcare, reallocating resources to education leads to significant increases in education output with only minimal losses in healthcare. The PPF's concavity from A to B demonstrates this effect: a relatively flat slope indicates small decreases in health outcomes for large gains in educational services. Thus, the PPF curve reflects the increasing opportunity costs and diminishing returns associated with transferring resources between two different goods.