Final answer:
Opportunity costs increase and the production possibilities frontier bows outward due to resource variability (C) and different resource uses (D) which are explained by the law of increasing opportunity cost.
Step-by-step explanation:
The student's question asks why opportunity costs increase and the production possibilities frontier (PPF) bows outward. The reason for this is due to resource variability and different uses—option C and D. As a society increases the production of one good, it must redistribute resources from other areas, often leading to increased opportunity costs because some resources are not as well-suited for the alternative application. This is compounded by the law of increasing opportunity cost, which states that as production of a good or service increases, the marginal opportunity cost of producing more of it also increases. This is depicted by the outward-bending shape of the PPF. The PPF showcases productive efficiency but also introduces the concept of allocative efficiency, which refers to a mix of goods that society prefers.
The law of diminishing returns also plays a role, as it describes how additional resources may lead to smaller increases in output, further affecting the PPF curve. The curvature of the PPF can vary by country, as different countries have comparative advantages in different goods, which allows for increased total production through