The production possibility curve (PPC) is a two dimensional model, showing how resources can be used to produce two different goods or services or types of good and services. We can draw the PPC on the basis of above schedule. increasing opportunity costs. Carefully follow the instructions above, and only draw the required objects. The bowed-out curve of Figure 2.5 “The Combined Production Possibilities Curve for Alpine Sports” becomes smoother as we include more production facilities. Want to read all 12 pages? The shape of this outward bowed PPC is due to A. decreasing opportunity costs. Using the 4-point curved line drawing tool, draw a curve connecting these points Label this curve PPC. Production Possibility Curve (PPC) is the locus (the path of a moving point) of various combinations of two commodities which can be produced with given level of resources and technology. The PPF is bowed inward with a reduction in the opportunity cost for an increasing level of production. Home » Uncategorized » a production possibilities frontier with a bowed outward shape indicates. The negative slope of the PPCs indicate that, in order to increase the output of one good, a country has to reduce the output of the other good. What the Shape of the Curve Tells You . The production possibility curve bows outward. TERM Spring '14; TAGS Macroeconomics, Unemployment. On the chart, that is Point A. D. constant opportunity costs. It is also known as transformation curve. C. increasing opportunity costs. Label this curve Carefuly towow the instructions above, and only draw the required abjects The shape of this outward bowed PPC is due to O A. increased production eficiency O B. increasing opportunity costs. Using the 4-point curved Nne drewing tool, draw a curve connecting these points. Properly label each point. Uncategorized. The production possibilities curve is bowed in shape because of the law of increasing opportunity cost, which explains the idea that the more units of a … Carefully follow the instructions above, and only draw the required objects. 2.) Label this curve 'PPC'. The shape of this outward bowed PPC is due to C. increasing opportunity costs. constant opportunity costs. a production possibilities frontier with a bowed outward shape indicates. B. increased production efficiency. The shape of this outward bowed PPC is due to decreasing opportunity costs. Scarcity implies that a production possibilities curve is downward sloping; the law of increasing opportunity cost implies that it will be bowed out, or concave, in shape. The economy produces 140,000 apples and zero oranges. You've reached the end of your free preview. The difference between the shapes of the PPCs as we can see from the above examples, depends on the opportunity cost. The highest point on the curve is when you only produce one good, on the y-axis, and zero of the other, on the x-axis. Properly label each point. There are two reasons why economists argue that the PPC must be bowed out.