Why is production possibility curve NOT a straight line?

Because of increasing MRS (marginal rate of substitution).

As more unit of good 1 is produced,there will be a decrease in the production of good 2(This is the theory of MRS). Only when MRS/MOC is constant, will the ppc be a straight line. In an economy (usually) there will be some MRS when producing two goods because of scarcity.

"Order a similar paper and get 100% plagiarism free, professional written paper now!"

Order Now