Question

If the given points A to F were depicted on a graph, such PPC would be _________.

Situation	Cellphones(units)	Rice(quintals)
A	$0$	$60,000$
B	$1000$	$55,000$
C	$2000$	$48,000$
D	$3000$	$38,000$
E	$4000$	$23,000$
F	$5000$	$0$

• A. convex to the origin
• B. concave the origin
• C. straight line
• D. rectangular hyperbola

Answer 1

Answer: (B)

concave the origin

In an economy, the following combinations of two goods can be produced with the available resources, and the given state of technology.
If the given points A to F were depicted on a graph, such PPC would be concave to the origin. PPC will be concave to the origin because of rising marginal opportunity cost as we move from point A to point F.CONCEPT: The slope of production possibility curve is marginal opportunity cost. Since resources are use specific, therefore every time when one more unit of a cellphone is produced more units of rice is sacrificed that results in increasing marginal opportunity cost which leads to concave shape of PPC.