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Friday, 18 May 2018

Concave PPC and Convex IC

Reason of Concave PPC and Convex IC

The most important question that is asked in CBSE board examination of economics subject is that why is PPC concave to the origin and why is IC convex to the origin.

PPC is concave because MRT or MOC tends to increase. MRT is calculated as here under

MRT = loss on Y axis/gain on X axis

MRT tends to increase in case of PPC because all resources are not efficient for the production of all goods. E.g A land may be not efficient for the production of rice. Such land will only be efficient for the production of wheat.

IC is convex because of decreasing MRS calculated same as MRT because of law of diminishing Marginal utility.



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