2nd November 2019


Why is the production possibilities curve is concave to the origin?

It is because resources like labor or capital must be relocated to produce weapons. Most of the PPF curves are concave due to the inadaptability of the resources. The law of increasing opportunity cost states: as the production of one good rises, the opportunity cost of producing that good increases.

Thereof, can PPC be convex to the origin?

Therefore the PPC curve can be convex to the origin when the opportunity cost decreases. This can happen only when less and less units are forgone of first commodity for the introduction of additional unit of another commodity. This will lead the Production Possibility Curve to be convex to origin.

What is convex to the origin?

(3) Indifference Curves are Convex to the Origin: This is an important property of indifference curves. They are convex to the origin. As the consumer substitutes commodity X for commodity Y, the marginal rate of substitution diminishes as X for Y along an indifference curve. It is convex to the origin.

Why is the production possibilities frontier A curved line?

The reason for the shape of the Production Possibilities Curve (PPC) is something called the law of increasing opportunity costs. Basically, what this means is that as an economy devotes more of its resources to one kind of product, it becomes less efficient.
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