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Question
PPF is concave to the origin because of ______.
Options
Increasing MRT
Diminishing MRT
Constant MRT
None of these
MCQ
Fill in the Blanks
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Solution
PPF is concave to the origin because of increasing MRT.
Explanation:
A concave PPF results from increasing MRT: to produce each additional unit of one good, more and more units of the other good must be sacrificed. Diminishing MRT would make it convex, and constant MRT would make it a straight line.
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