Why is PPC downward sloping?

PPC curve is downward sloping from left to right. This is because the production of every additional unit of one good, more and more units of other goods has to be sacrificed.

Why PPC slope downward and concave to the origin?

PPC is concave to the origin because of increasing Marginal opportunity cost. This is because inorder to increase the production of one good by 1 unit more and more units of the other good have to be sacriced since the resources are limited and are not equally efficient in the production of both the goods.

Why is the PPC curve concave?

Production Possibility Curve (PPC) is concave to the origin because of the increasing opportunity cost. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. And this causes the concave shape of PPC.

Why is the PPF curved?

The first is the fact that the budget constraint is a straight line. This is because its slope is given by the relative prices of the two goods. In contrast, the PPF has a curved shape because of the law of the diminishing returns. The second is the absence of specific numbers on the axes of the PPF.

Why PPC curve look concave?

Production Possibility Curve (PPC) is concave to the origin because of the increasing opportunity cost. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. This confirms the concave shape of PPC.

Can a PPC be upward sloping?

No, When you exand production of one good you must reduce production of some other good in order to produce it.

What is the slope of PPC What does it indicate why is PPC concave to the origin?

Production possibility curve is concave to the origin. It shows an increasing slope because more and more of commodity Y is to be sacrificed for every additional unit of commodity X.

Why does the PPF bow outward?

The short answer is: increasing opportunity cost. The PPF is bowed outward because resources are not all equally productive in all activities. The more we produce of either good, the less productive are the additional resources we use and the larger is the opportunity cost of one unit of that good.

Why is the PPC a curve and not a straight line?

Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. This is known as opportunity cost.

Why is PPF a straight line?

If opportunity costs are constant, a straight-line (linear) PPF is produced. This case reflects a situation where resources are not specialised and can be substituted for each other with no added cost.

Why is PPC upward?

But in the case that the PPC moves “upwards”, i.e. the vertical intercept increases, it implies that the economy can now produce more of the good that is represented by the vertical axis. And in the case, the PPC moves outwards, it implies that the economy can now produce more of both goods.

Why is the PPC curved?

Key model. The Production Possibilities Curve (PPC) is a model that captures scarcity and the opportunity costs of choices when faced with the possibility of producing two goods or services. The bowed out shape of the PPC in Figure 1 indicates that there are increasing opportunity costs of production.