1.

PPF is concave to the origin because of:

Answer»

Increasing MRT
Diminishing MRT
Constant MRT
None of these.

Solution :A. PPC is concave to the point of origin because to PRODUCE each ADDITIONAL unit of Good 1, more units of Good 2 will have to be sacrificed. Opportunity cost of producing every additional unit of Good 1 tends to increase in terms of the loss of production of Good 2. Production will act UPON the LAW of increasing marginal opportunity cost.


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