Question

A nation's production possibilities curve is bowed out from the origin because

A. resources are not generally equally efficient in producing every good.
B.opportunity costs of producing a good tend to fall as more of the good is produced.
C.resources are scarce.
D.wants are virtually unlimited.

Answer 1

A nation's production possibilities curve is bowed out due to the law of increasing opportunity cost which reflects that resources are not equally efficient in producing every good, and the opportunity cost increases as more of one good is produced.

Step-by-step explanation:

A nation's production possibilities curve is bowed out from the origin because resources are not generally equally efficient in producing every good. This concept is known as the law of increasing opportunity cost, which holds that as the production of one good increases, the opportunity cost of producing that good increases as well. This happens because resources are better suited for producing certain goods over others. For instance, as a nation dedicates more resources to education, the initial increase in opportunity cost is small but grows over time. Conversely, as more resources are put towards healthcare, the opportunity cost first declines substantially and then gradually diminishes. This creates the concave, outward-bending shape of the production possibilities curve.

Productive efficiency and allocative efficiency are also important concepts related to a nation's production choices. While an efficient organization operates without waste and within budget, an inefficient one has higher costs and potentially long delays. The production possibilities curve illustrates these trade-offs and the need for societies to decide how to best use their scarce resources, also taking into account the cost of not producing certain goods and potentially importing them based on international opportunity costs.

Answer 2

A. Resources are not generally equally efficient in producing every good.

The bowed-out shape of a production possibilities curve reflects the concept of increasing opportunity costs. As an economy moves along the curve and specializes in the production of one good over another, the opportunity cost of producing the additional units of the chosen good tends to increase. This is often due to the fact that resources are not equally efficient in the production of all goods and services.