Why is production possibility curve concave? Explain.

1.	Why is production possibility curve concave? Explain.
Answer» <html><body><p></p>Solution :Production Possibility <a href="https://interviewquestions.tuteehub.com/tag/curve-941741" style="font-weight:bold;" target="_blank" title="Click to know more about CURVE">CURVE</a> is concave to the origin because of increasing marginal rate of transformation (MRT). i.e., more and more units of on commondity are sacrificed to gain an <a href="https://interviewquestions.tuteehub.com/tag/additional-367648" style="font-weight:bold;" target="_blank" title="Click to know more about ADDITIONAL">ADDITIONAL</a> unit of another <a href="https://interviewquestions.tuteehub.com/tag/commodity-923558" style="font-weight:bold;" target="_blank" title="Click to know more about COMMODITY">COMMODITY</a>. <br/> MRT increases because it is assumed that no resource is equally efficient in production of all goods As resources are transferred from one good to another, <a href="https://interviewquestions.tuteehub.com/tag/less-1071906" style="font-weight:bold;" target="_blank" title="Click to know more about LESS">LESS</a> and efficient resources have to be employed. This raises <a href="https://interviewquestions.tuteehub.com/tag/cost-25707" style="font-weight:bold;" target="_blank" title="Click to know more about COST">COST</a> and rises MRT.</body></html>

Discussion