Question

c) Production Possibility Curve is: (i) Concave to the axis (iii) Parallel to the axis (ii) Convex to the axis (iv) Vertical to the axis.​

Answer 1

Explanation:

The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. Since resources are use specific, therefore every time when one more unit of a commodity is produced more units of the other commodity is sacrificed that results in increasing marginal opportunity cost which leads to the concave shape of PPC to the origin.