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DIFFERENT SHAPES OF PRODUCTION POSSIBILITY CURVE

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  Learning Contents:                                                              ·          Understanding the Concave shape of PPC ·          Understanding the Linear   shape of PPC ·          Understanding   the Convex   shape of PPC Concave Shape: The concave shape of the production possibility curve occurs due to increasing marginal opportunity cost. It means that in order to produce more units of good X, more and more units of Good Y is to be sacrificed. This is because of the application of the  law of diminishing returns. Below mentioned table 5 and diagram 5 would reveal why the shape of PPC is convex to the point of origin as we can see that to produce more units of clothes, more and more units of the production of shoes are to be sacrificed which is indicated by increasing or rising opportunity cost. Table 5: Production Possibility Schedule Clothes 0 1 2 3 4 5 Shoes 30 28