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Thursday, 21 June 2018

Why is Marginal Rate of Transformation tends to rise in case of PPC?

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As we know that in PPC is concave to the origin because MRT/MOC tends to rise. It is very important to know that why is MRT tends to rise. MRT tends to rise because resources are not equally efficient for the production of all commodities. For example, a land may be efficient for the production of wheat not for rice, maize etc . Therefore if an economy wants to produce rice on such land , amount of wheat will be sacrificed more and more with the production of rice.

Click to know about production possibility curve.

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