Answer to Question #162397 in Microeconomics for Robert Sayi

Question

Under what circumstances will the ppc exhibit a convex shape

Answer 1

The production possibility curve (PPC) shows all possible combinations of output that a country can produce given the currently available resources and technology. Usually, PPC is concave, implying the possibility of a trade-off. The circumstances under which PPC can be convex is when some of the economy resources are better able to produce one good x than another good y while other economy resources can better make good y than good x.