It is argued that there are no pure command or pure market economies,all economies are mixed.
Explain why the shape of production possibility frontier is bow -shaped
The shape of the production possibility frontier is bow-shaped because of the concept of opportunity cost. When an economy produces only one good, it can allocate all of its resources efficiently to that production. However, when an economy produces multiple goods, it must allocate its resources between the different goods, leading to an opportunity cost.
As production of one good increases, the opportunity cost of producing additional units of that good increases as well. This is because resources are not equally suited to producing every good, and as more resources are dedicated to the production of one good, the resources that are best suited to producing the other goods are being underutilized.
This results in a bow-shaped production possibility frontier, as the slope of the curve represents the opportunity cost of producing one good in terms of the other. As a result, the trade-offs between producing different goods in an economy are reflected in the shape of the production possibility frontier.