The shape of the production possibility frontier is determined by the_________

1. Analyze the question The question asks what determines the shape of the production possibility frontier (PPF). That means the reason the curve is bowed outward (concave to the origin) rather than a straight line.

2. Explain the concept The PPF (or production possibility curve) shows the maximum combinations of two goods an economy can produce when all resources are fully and efficiently used.

• The position of the PPF (how far from the origin) depends on the quantity and quality of factors of production and the level of technology. More resources or better technology shifts the curve outward.
• The shape of the PPF depends on the opportunity cost of moving resources from one good to another.

Resources are not equally suited to producing every good. As an economy moves more resources into one good, it must use resources that are less and less suited to it. Each extra unit of that good then costs more of the other good. This is increasing opportunity cost, and it is explained by the law of diminishing returns (the law of increasing costs). This is what makes the curve bow outward.

3. Work through the options

• A. Law of returns to scale: This concerns what happens to output when all inputs are increased together (long run). It does not explain the curve's curvature.
• B. Law of diminishing returns: Adding more of a variable factor to fixed factors gives smaller extra output. This is what produces increasing opportunity cost, and therefore the bowed shape.
• C. Factors of production: These determine the position or size of the frontier, not its shape.
• D. Technology: Technological progress shifts the frontier outward. It does not explain the curvature.

4. Answer The correct option is B. law of diminishing returns.

5. Exam tip Remember: Shape = Diminishing returns (increasing opportunity cost). Position or shift = Resources and technology. If a JAMB question says "shift" or "growth", think factors of production and technology. If it says "shape" or "slope", think diminishing returns and opportunity cost.