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Introduction of Micro-Economics — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsIntroduction of Micro-Economics3 Marks
Question
Why is a production possibility curve concave to the origin? Explain.
OR
Why is a typical production possibility curve concave? Explain.
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Answer

PPC looks concave to origin because of increasing marginal opportunity cost or marginal rate of transformation. The increasing marginal opportunity cost means that for producing an additional unit of a good, the sacrifice of units of the other good goes on increasing. This behaviour is based on the assumption that all resources are not equally efficient in the production of all goods.

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