Practicing Success
What will be the shape of the PPC in the table below?
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Concave Convex Straight line Can be of any shape |
Straight line |
The schedule shows that marginal opportunity cost of producing more of good A in place of good B does not change. Thus, PPC should be a downward sloping straight line. Generally, due to increasing marginal rate of transformation the shape of the PPC is concave to origin. |