This is because it shows the maximum gain of two products used in production. The shape of the production possibilities frontier in Figure 3-1 implies that. Units of good X are measured horizontally and that of Y on the vertical axis. The downward slope of the PPC represents the opportunity cost concept. The linear PPC shows constant opportunity cost and the concave PPC shows increasing opportunity cost. the shape of the PPC is concave i.e moving from left to right i.e as we move downwards along the PPC the MRT rises. The slope of production possibility curve is the marginal opportunity cost which refers to the additional sacrifice that an economy must make when it shifts resources and technology from production of one commodity to the other. The curve of PPC shows convex. A production possibilities curve that is concave to the origin (bowed out) implies that as more of a good is produced, the opportunity cost increases A simultaneous increase in both the demand for and the supply of a good in a market will lead to which of the following changes in the equilibrium price and quantity of the good? PPC is concave to the origin because of increasing slope, as we move along this curve, from left to right. The Law of Increasing Opportunity Cost that is shown in a Production Possibilities Curve is concave to the origin. The PPC for an increasing opportunity cost slope from left to right and is concave from the origin. The concave curve PP 1 depicts the various possible combinations of the two goods, P, В, C, D and P 1. G is the inefficient combination, which is inside the PPC. The bowed-out curve of Figure 2.5 “The Combined Production Possibilities Curve for Alpine Sports” becomes smoother as we include more production facilities. Ans. The concavity or bowed-out shape of the production possibilities frontier is the result of. ... Increasing MRT implies increasing slope of PPC. MCQs of CBSE Class 11 Microeconomics Chapter 2 – Central Problems of an Economy. The slope is a graphical representation of the rate of trade-off between the goods. The above PPF shows that the opportunity cost remains constant as we increase the output of one good. Therefore, if marginal opportunity cost decreases then PPC will be convex to the origin owing to decreasing slope. Scarcity implies that a production possibilities curve is downward sloping; the law of increasing opportunity cost implies that it will be bowed out, or concave, in shape. Basically, it shows the tradeoffs that one has to make when alternating between two products with a given set of resources that can be used to make such products. a. straight line b. convex to the point of origin c.concave to the point of origin d. none of these Q. The slope of the PPC measures MRT/MOC. Concavity of PPC implies: increasing slope; decreasing slope; constant slope; none of these; READ ALSO Free Online MCQ Questions for Class - 9 Science Chapter 1 - Matter in our Surroundings with Answers. Slope of PPC is an economic model that illustrates the concept of opportunity cost. This is due to decreasing of opportunity cost .For example, if in production of more butter ,fewer guns are forgone. From Figure, it can be noticed that PPC is concave to origin. Since slope of PPC = MOC, increasing slope implies increasing MOC. The curve of PPC … Table 5.1 is represented diagrammatically in Figure 5.6. It implies that the resources are underutilised. Can PPC be a straight line? It is because the increase in production of one unit of good is accompanied by the sacrifice of units of the other good. Yes, when MRT or MOC is constant. Slope of PPC IS? Answer Key. Is an economic model that illustrates the concept of opportunity cost.For example if... 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