Why a production possibilities curve concave? Explain.
Dear student
When a curve is concave to the origin ,it means that it has an increasing slope,as we move along this curve ,from left to right.since slope of PPC=Marginal ooportunity cost, increasing slope implies increasing marginal opportunity cost.
accordingly, it concluded that PPC is concave to the origin ,because more and more resources are shifted from opportunit-1 to opportunity-2 , marginsl opportunity cost tends to rise.
Regards
When a curve is concave to the origin ,it means that it has an increasing slope,as we move along this curve ,from left to right.since slope of PPC=Marginal ooportunity cost, increasing slope implies increasing marginal opportunity cost.
accordingly, it concluded that PPC is concave to the origin ,because more and more resources are shifted from opportunit-1 to opportunity-2 , marginsl opportunity cost tends to rise.
Regards