properties of production possibility curve
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The curve which shows the combination of two goods and services that can be produced with Fuller utilisation of a given amount of resources in the most efficient way and with a given production technology is called production possibility curve. it is also known as production possibility frontier and transformation curve.
the properties of production possibility curve -
- Concave to origin - PPC curve is concave to the origin . This because of the increasing opportunity cost that is in accordance with the law of increasing opportunity cost.
- INCREASING MARGINAL RATE OF TRANSFORMATION : The slope of PPC ( MRT ) soldier, for the production of every additional unit of one good, more and more units of other good has to be sacrificed in in other words as we move down along the PPC, the PPC of slope increases.
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the properties of production possibility curve -
- Concave to origin - PPC curve is concave to the origin . This because of the increasing opportunity cost that is in accordance with the law of increasing opportunity cost.
- INCREASING MARGINAL RATE OF TRANSFORMATION : The slope of PPC ( MRT ) soldier, for the production of every additional unit of one good, more and more units of other good has to be sacrificed in in other words as we move down along the PPC, the PPC of slope increases.
hope it's helpful and mark me as a brain list...
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