Production possibilities frontiers are usually bowed outward. This is because:

• A. resources are not equally efficient in producing every good
• B. the economy always operates at full employment
• C. all resources are perfectly adaptable to producing any good
• D. opportunity costs are constant for all combinations of goods

Answer: (A)

Verified step by step guidance

1. Understand what a Production Possibilities Frontier (PPF) represents: it shows the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
2. Recall that a bowed outward (concave) PPF indicates increasing opportunity costs, meaning that producing more of one good requires giving up increasingly larger amounts of the other good.
3. Recognize that increasing opportunity costs occur because resources are not equally efficient in producing every good; some resources are better suited for producing one good than another.
4. Contrast this with the case of constant opportunity costs, which would produce a straight-line PPF, implying resources are perfectly adaptable and equally efficient in producing both goods.
5. Conclude that the bowed outward shape of the PPF is due to the fact that resources are not equally efficient in producing every good, leading to increasing opportunity costs as production shifts between goods.