Unformatted text preview: inside the curve is inefficient and hence not desirable (though possible). At such a point, units of one or both the goods are produced in smaller quantities than what is otherwise possible. Hence the resources are either utilized inefficiently or wastefully. On the other hand, any point outside the curve such as H is not attainable (though desirable) with the given amount of resources. Hence the only points, both desirable and possible, occur along the P.P.F. curve. The curve slopes downwards and bulges outwards. Such a shape satisfies the two properties (the Y units diminishing as the X units increase, and an increasing rate of sacrificing Y units) manifested by the P.P.F. Schedule. Such a curve is called strictly concave to the point of origin ....
View Full Document
- Fall '10
- Continuous function, production possibility frontier, p.p.f.