A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. Question: A realistic production possibilities curve: (a) is more concave than one assuming increasing opportunity costs. ... PPC is concave shaped because more and more units of one commodity are sacrificed to gain an additional unit of another commodity. See the answer. The Contract Curve and the Production Possibility Curve Frank S. T. Hsiao University of Colorado The purpose of this paper is to show that the assumption of linear homo-geneity of the neoclassical production function only leads to concavity at the two ends of the production contract curve. The production possibility curve also shows the choice of society between two different products. Production points inside the curve show an economy is not producing at its comparative advantage. C Horizontal Production Possibilities Curve. Production Possibility curves can assume different slopes. Production Possibility curves can assume different slopes. Moving along the production possibilities curve, the slope becomes steeper (that is, the absolute value of the slope increases), reaching a value of -200 (an absolute value of 200) between points J and K. This reflects an increasing opportunity cost of producing storage sheds, resulting in a convex shape for the production possibilities curve. A concave curve rounds inward. If the production is governed by diminishing returns, MC X rises relative to the MC X. One end of the axis reveals the quantity produced if the business allocated all of its resources to making that particular good. The other axis shows how much of an item can be produced if its resources were allocated to the production of the second good. In such a situation, the opportunity cost curve is a negatively sloping concave curve to the origin. B Production Possibilities Curve Convex To The Origin. In the section of the curve shown here, the slope can be calculated between points B and B′. It means the slope of the production possibility curve or opportunity cost curve is the same and it is a negatively sloping straight line. "Up, because of opportunity cost." As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. For example MRT between the possibilities D and E is equal to DH/HE and between E and F, it is equal to EI/IF and so on. PPC is concave to the origin because of increasing Marginal opportunity cost. Do production possibility frontiers slope up or down and why? a straight line with a negative slope.d. bowed outward away from the origin.C. It is a wiggly line or bent line which wiggles or bends to join any two points on a graph or a map. Most of the PPF curves are concave due to the inadaptability of the resources. A Production possibilities curve concave to the origin. The first type of curve has a constant negative gradient or constant ratio which also means that as one item/good decreases by one, the other item/good … Let's look at an example to better explain this concept. positively sloped with a convex curvature.e bowed The production possibilities curve is also called the production possibility frontier, because any point beyond the curve represents an impossible situation. This information is represented on a curve known as Production Possibility Curve as shown below. Curves can be divided into categories of convex and concave curves. If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be:a positively sloped with a concave curvature.b. (b) is more convex than one assuming constant opportunity costs. If the answer is not available please wait for a while and a community member will probably answer this soon. Steepest slopes at the beginning of the process with a progressively decreasing angle over time to give a convex upper slope and a concave lower slope CHANGES OVER TIME Assumed a rapid uplift of land with an immediate onset of denudation. none of these are solved by group of students and teacher of Class 12, which is also the largest student community of Class 12. On the other hand, a convex curve is rounded like the exterior of a sphere or a circle. 1 Explain Why A Production Possibilities Curve Is Concave Explain how production possibility curves can be used to demonstrate the problem of unemployment, effects of technological change and the benefits of economic growth Human wants are unlimited and resources are scarce. This indicates that factors of production may be substituted with one another. A production possibilities boundary (or production possibilities frontier/curve) is a curve that shows which alternative combinations of commodities can be attained if all resources are used efficiently. That is, as we move down along the PPC, the opportunity cost increases. Remember: A PPF (production possibilities frontier) shows the different combinations of goods that can be produced in a certain amount of time given fixed inputs.If any of these factors change, than the PPF will change as well. are solved by group of students and teacher of Commerce, which is also the largest student community of Commerce. It forms a shape that looks like a cave or a rainbow. It specifies the alternative outputs that can be achieved with different levels of inputs. "Slope of IC curve is MRS (Marginal rate of substitution)" MRS fall which lead to convex shaped IC curve" History. As far as i know it can be either concave, convex or a straight line. In other words, according to the graph Country A cannot simultaneously produce 401 loaves of bread and 700 guns, nor can it bake 400 … A production possibilities curve outlines the relationship between a company’s choices in the production of two items. Points within the curve show when a country’s resources are not being fully utilised There are 3 types of production possibility curve which are straight-line sloping down, concave and convex curve. A concave curve is one that bends outward from the origin. A production possibility curve (PPC) is concave because the marginal cost of production increases as production increases. The theory of indifference curves was developed by Francis Ysidro Edgeworth, who explained in his 1881 book the mathematics needed for their drawing; later on, Vilfredo Pareto was the first author to actually draw these curves, in his 1906 book. The Questions and Answers of Why is production possibility curve concave? Answer (1 of 1): Holding the stock of resources and technology constant (ceteris paribus) , the law of increasing opportunity cost causes Production possibility curve to display concave to the origin (bowed -out shape)regards, deepa "Down, because of the demand curve." Characteristics of Production Possibility Curve (PPC) PPC slopes downward – PPC shows all the maximum possible combinations of two goods which can be produced with the available resources and technology.