In a simple world where resources are abundant a production possibilities frontier between two goods may be a striaght line. In a more developed and populated world it is to bow outward. Explain why.

In order to understand why a production possibilities frontier (PPF) might be a straight line in a simple world with abundant resources, but bow outward in a more developed and populated world, we need to consider the concept of scarcity and the factors that affect production.

In economics, scarcity refers to the limited availability of resources (such as land, labor, capital, and technology) compared to the unlimited wants and needs of individuals and society. A PPF represents the different combinations of two goods that an economy can produce given its available resources and technology.

In a simple world with abundant resources, it is assumed that the supply of resources is not constrained, and the economy can efficiently allocate them to produce goods. In this scenario, the PPF is a straight line, indicating that the trade-off between producing the two goods is constant. For example, if an economy only produces two goods, such as computers and bicycles, and has an abundance of resources, it can allocate resources equally to produce an equal number of computers and bicycles. The opportunity cost of producing one more computer is the same as producing one more bicycle.

However, in a more developed and populated world, the availability of resources becomes limited relative to the increasing wants and needs of people. As the population grows and technology advances, resources become scarcer and their allocation becomes more complex. This leads to an expanding PPF that bows outward, indicating an increasing opportunity cost of producing one more unit of a good.

There are several reasons why the PPF bows outward in a more developed and populated world:

1. Law of diminishing returns: As more resources are allocated to one good, while keeping the resources allocated to the other good constant, the marginal increase in output diminishes. This means that the opportunity cost of producing additional units of one good increases, as resources are shifted from producing the other good.

2. Specialization and comparative advantage: As an economy develops, resources and labor become more specialized, which leads to an increase in productivity. As a result, some goods can be produced more efficiently than others, creating a comparative advantage. The PPF bows outward to reflect this specialization and the increasing opportunity cost of producing goods in which the economy does not have a comparative advantage.

3. Technological progress: In a more developed world, advancements in technology enable greater efficiency in production processes, allowing more output to be produced with the same amount of resources. This leads to an expansion of the PPF outward, as the economy can produce more of both goods without sacrificing one for the other.

Overall, the bowing outward of the PPF in a more developed and populated world reflects the increasing scarcity of resources, the law of diminishing returns, specialization, comparative advantage, and technological progress. These factors result in an increasing opportunity cost of production, driving the PPF away from a straight line.