This derivative is increasing in value, which means that the second derivative over an interval where we are concave upwards must be greater than 0. Geektonight is a vision to provide free and easy education to anyone on the Internet who wants to learn about marketing, business and technology etc. MCQs of CBSE Class 11 Microeconomics Chapter 2 – Central Problems of an Economy. How are the slope of a production possibilities frontier and the opportunity cost of the goods related? 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. increase in output of good X is possible only when there is decrease in output of good Y. Here, our production possibility curve, or our PPC, it looks like a straight line. It enables the planning authority of a developed nation to divert the usage of its resources for the production of necessary goods to the production of luxury goods and from consumer goods to producer’s goods, after a certain point of time. From Figure, it can be noticed that PPC is concave to origin. The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The implied PPC is plotted in fig. It is because the increase in production of one unit of good is accompanied by the sacrifice of units of the other good. However, in the former case the ... a decrease in quantity demanded of poultry and an increase in the demand for fish. The curve of PPC shows convex. ⏩PPC (Production Possibility Curve) is Concave to the origin . "(#)= % 0)is continuous. Answer Key. Therefore, if marginal opportunity cost decreases then PPC will be convex to the origin owing to decreasing slope. Answered by | … On the left side the slope is negative; however, as x increases the slope gets less and less, -5, -3, -2, till it reaches 0, from where on it increases to 1, 5, 6, etc. The shape of transformation curve is changed by. Figure 2 Definition of Concavity One way to represent a system described by the One-Dimensional Motion with Constant Acceleration Model graphically is to draw a velocity versus time graph for that system. A production possibilities curve has a downward slope because increased production of one good always reduces production of the other If production involves constant opportunity cost, the production possibilities curve is a straight line It shows an increasing slope because more and more of commodity Y is to be sacrificed for every additional unit of commodity X. Production Possibilities Curve as a model of a country's economy. Two goods a and E are the slope of the increasing opportunity decreases! 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