Question

In order for a nation's PPF to bea straight line , resources must be somewhat specialized, so that the law of increasing opportunity cost holds. In order for a nation's PPF to bebowed outward , there must be complete interchangeability of resources.

Answer 1

When the PPF bowed outwards, the resources are specialized and cannot be interchanged and when slope of PPF is straight line, there is complete interchangeability of the resources.

What is the Production possibility frontier?

The Production possibility frontier is an economic curve that illustrates the amounts of two products that can be produced while both of them depend on the exhaustible resources.

The slope of the PPF curve explains an opportunity cost of a production.

In conclusion, when the PPF bowed outwards, the resources are specialized and cannot be interchanged and when slope of PPF is straight line, there is complete interchangeability of the resources.

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