1.5.2—PPC shape and opportunity cost

Moving along a PPC shows the opportunity cost of producing more of one output. A straight line implies constant opportunity cost; a bowed-out curve implies increasing opportunity cost as resources become less suitable for the new use.

The slope is the amount of the vertical-axis output forgone per extra unit of the horizontal-axis output, with sign depending on the graph convention.

If each extra machine costs two units of food, the PPC is linear. If increasingly specialised farmland is moved into machinery, food forgone per machine rises and the curve bows outward.

The curve’s shape is not an artistic choice: it encodes the transferability and opportunity cost of resources.