Q364
The shape of PPC is concave due to
A.
Falling opportunity cost between two goods
B.
Rising opportunity cost between two goods
AnswerC.
Constant opportunity cost between two goods
D.
None of the above
Answer: Option B
Solution
Answer: Option B
Solution:
The shape of PPC is concave due to rising opportunity cost between two goods. Most of the PPF curves are concave due to the inadaptability of the resources. The law of increasing opportunity cost states: as the production of one good rises, the opportunity cost of producing that good increases.