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What does a straight-line production possibilities frontier (PPF) represent? What does a bowed-outward PPF represent?

What does a straight-line production possibilities
frontier (PPF) represent? What does a bowed-outward
PPF represent?

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Answer #1

A straight line production possibilities frontier means that if two different products are produced then the opportunity cost will be constant.It means that increased production of one product will be managed by decreased production of other.For example , production of soyabean is increased and production of wheat is reduced so that opportunity cost which means cost incurred in producing extra units of soyabean will be managed by reducing wheat production

Abowed- outward PPF represent increasing opportunity cost.It means if a country is producing two products then suppose it is efficient in producing first product then it start working on other one.since resources are scarce then focussing on second product result in increased opportunity cost.As a result there is a bowed- outward PPF.

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