Why is the PPF concave?
Understand the Problem
The question is asking why the production possibility frontier (PPF) is shaped concavely. The PPF illustrates the maximum feasible output combinations of two goods that can be produced, given fixed resources and technology. The concave shape reflects the principle of increasing opportunity costs, which states that as production of one good increases, more of the other good must be sacrificed, leading to a non-linear trade-off.
Answer
increasing marginal opportunity costs
The final answer is increasing marginal opportunity costs
Answer for screen readers
The final answer is increasing marginal opportunity costs
More Information
The concave shape of the Production Possibilities Frontier (PPF) represents the increasing marginal opportunity costs. This means that as more of one good is produced, increasingly larger amounts of other goods must be sacrificed.
Tips
A common mistake is to assume that the PPF is concave for reasons other than increasing marginal opportunity costs, such as scarcity of resources uniformly or technological limitations
Sources
- Why is production possibility curve concave? - Toppr - toppr.com
- Why is the production possibilites curve concave? Explain. - BYJU'S - byjus.com
- Production–possibility frontier - Wikipedia - en.wikipedia.org
