The PPF is concave to the origin because:
A)the marginal rate of transformation increases as we move down the PPF.
B)the marginal rate of technical substitution increases as we move up the PPF.
C)the marginal rate of technical substitution decreases as we move up the PPF.
D)the opportunity cost of producing a commodity decreases with increase in its production.

Question

Quizplus · Accepted Answer

The PPF is concave to the origin because the marginal rate of transformation (MRT) decreases as we move down the PPF. This means that to produce more of one good, we must give up increasingly larger amounts of the other good. As we move down the PPF, resources become more specialized in the production of one good, causing the MRT to increase. Therefore, the PPF is concave to the origin.

The PPF Is Concave to the Origin Because