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Chapter 2: 12 (page 44)

Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?

Short Answer

Expert verified

It's a graph that depicts the many combinations of two items that a given economy can generate given its resources and technology.

Step by step solution

01

Step 1

Because of the premise of an increasing marginal rate of technology substitution, the Production Possibility Frontier is usually depicted as a curve. As we move from left to right, the MRT rises, making the curve concave toward the origin.

02

Step 2

The slope of the PPF, or Marginal rate of transformation (MRT), is constant if the PPF is a downward sloping straight line. That is, in the case where both items are natural perfect alternatives.

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