A production possibility curve (PPC) shows the maximum output of two goods that can be produced with given resources and technology. A downward sloping PPC indicates that as the production of one good increases, the production of the other good decreases. The shape of the curve depends on the resources and technology available for production.


A concave PPC is a curve that bends inwards towards the origin. This occurs when the opportunity cost of producing one good increases as more of it is produced. In other words, resources are not equally efficient in producing both goods. As more resources are allocated towards one good, the marginal productivity of these resources decreases, leading to higher opportunity costs and a concave PPC.


There are several factors that can lead to a concave PPC, including:

• Specialization of resources: If resources are specialized in producing one good, then increasing the production of that good will require increasingly more resources that are less efficient in producing the other good.


• Technological limitations: If technology is limited, then increasing production of one good may require more resources that are less efficient in producing the other good.


• Diminishing marginal productivity: As more of a resource is allocated towards one good, its marginal productivity decreases, leading to higher opportunity costs.

A concave PPC has several implications for an economy, including:

• Opportunity cost: The opportunity cost of producing one good increases as more of it is produced, leading to a trade-off between the two goods.


• Economic growth: In order to shift the PPC outwards and increase production of both goods, an economy must invest in new resources and/or technology.


• Efficiency: An economy is most efficient when it produces at a point on the PPC, which represents the optimal allocation of resources.

In conclusion, a downward sloping PPC that is concave to the origin indicates that the opportunity cost of producing one good increases as more of it is produced. This can occur due to specialization of resources, technological limitations, or diminishing marginal productivity. A concave PPC implies a trade-off between the two goods, and in order to increase production of both goods, an economy must invest in new resources and/or technology.

Yes