Final answer:
The statement is true; the production possibilities curve does reflect that the production of two goods such as bicycles and computers is subject to increasing opportunity costs due to the law of increasing opportunity cost, signified by a concave, or bowed-out, curve shape.
Step-by-step explanation:
The statement that 'the production possibilities curve reflects that the production of both bicycles and computers is subject to increasing opportunity costs' is True. The production possibilities curve (PPC) illustrates the concept of opportunity cost, which indicates that to produce more of one good, a larger amount of another good must be given up due to the scarcity of resources. When we are at a point on a PPC where we are considering whether to produce more bicycles or more computers, if we decide to produce more of one, we are faced with the question of how much of the other good we have to give up.
To further understand why opportunity costs increase, we notice that the PPC is not a straight line but rather bowed out or concave. This is due to the law of increasing opportunity cost, which states that as the production of a good expands, the opportunity cost of producing an additional unit rises. This happens because resources are not equally efficient in producing all goods. The outward-bending shape of the PPC demonstrates that when resources are transferred to the production of one good, the losses in the production of another good become progressively larger, thus illustrating increasing opportunity costs.