Question

Q.2. PPC is concave to the origin. What does it indicate?​

Answer 1

Answer:

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. ... In the above graph, AE represents the PPC for capital goods and consumer goods.

Answer 2

It indicates that, as resources are shifted from Opportunity -1 to Opportunity -2 , marginal opportunity cost tends to rise