Explain why the shape of the production possibility frontier is bow-shaped
The production possibility frontier (PPF) is typically bow-shaped due to the concept of opportunity cost. As an economy produces more of one good, it must sacrifice some production of another good. This is because resources are scarce and not infinitely available.
At the beginning of the PPF curve, resources are typically specialized in the production of one good, so shifting resources towards the production of a different good would result in a relatively small sacrifice in terms of lost production. This is why the curve is relatively flat at the beginning (representing low opportunity cost).
However, as an economy continues to produce more of one good and shift resources away from another, the opportunity cost of producing one more unit of the first good increases, resulting in a steeper curve. This is why the PPF is bow-shaped, as the opportunity cost of producing more of one good increases as resources are shifted away from the production of another good.
In essence, the bow shape of the PPF represents the fact that resources are not infinitely available, and there is an opportunity cost associated with producing more of one good over another.