BECC-101(EM) 2025-26

• Slope of the PPF: The MRT at any point is equal to the absolute value of the slope of the PPF. It indicates the opportunity cost of producing one more unit of one good in terms of the other. • Concavity and MRT: Because of increasing opportunity cost, the PPF is concave and MRT increases as we move from left to right along the curve. That is, the more you produce of one good, the more of the other good must be given up. • Efficiency and MRT: At every point on the PPF, the MRT reflects efficient allocation of resources. If MRT is equal to the ratio of the goods’ market prices, then the economy is in equilibrium.