Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?

The Production Possibilities Frontier (PPF) is an economic model that demonstrates the trade-offs a society faces in the production of two goods. The PPF shows the maximum possible production levels of each good if all resources are efficiently allocated. The graph represents different combinations of production levels of two goods that can be produced with the given resources and technology.

The opportunity cost is the cost of forgoing the next best alternative when making a choice. In the context of a PPF, the opportunity cost of producing more of one good is the amount of the other good that must be given up. A crucial factor in determining the shape of a PPF is how the opportunity cost between the two goods changes as production levels change.

A straight-line PPF implies that the opportunity cost between the two goods is constant. This occurs when resources are perfectly substitutable between the production of the two goods. In this case, the trade-off between producing one good and the other remains the same regardless of how much of each good is produced. Essentially, a straight-line PPF indicates that resources can be shifted from producing one good to the other without any loss in efficiency.

A curved PPF, on the other hand, implies that the opportunity cost between the two goods changes as production levels change. This is because resources are not perfectly substitutable between the production of the two goods. When resources are specifically suited to produce one good more than the other, the opportunity cost will increase as more of that good is produced. For example, consider a society that produces both apples and oranges. Initially, moving resources from apple production to orange production might lead to a small reduction in apple output but a large increase in orange output. However, as more resources are shifted to orange production, the remaining resources are more specialized and efficient in producing apples. At this point, the opportunity cost of producing additional oranges (in terms of the reduction in apple output) increases. This increasing opportunity cost results in a concave or curved PPF.

A production possibilities frontier is typically drawn as a curve rather than a straight line because it reflects the increasing opportunity cost between the production of two goods. As production levels change, resources become less perfectly substitutable between the production of the two goods, leading to an increasing opportunity cost. This is why the PPF is usually presented as a curved or concave shape.