Answer:
Production Possibility Curve (PPC) is concave to the origin because of the increasing marginal opportunity cost. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good needs to be sacrificed. That is, as we move down along the PPC, the marginal opportunity cost increases. This is called as the law of increasing opportunity cost. In the above figure, AE represents the PPC for capital goods and consumer goods. Suppose the initial production point is B, where 1 unit of capital good and 48 units of consumer goods are produced. To produce one additional unit of capital good, 4 units of consumer good must be sacrificed (point C). Thus, at point C the opportunity cost of one additional capital good is 4 units of consumer goods. On the other hand, at point Z), the opportunity cost of producing one additional unit of capital good is 9 units of consumer goods. Thus, as we move down the PPC form point C to point D, the marginal opportunity cost increases. This confirms the concave shape of PPC. 
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