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प्रश्न
Define Production Possibilities Curve. Explain why it is downward sloping from left to right.
उत्तर
Production Possibilities Curve (PPC) refers to that curve which depicts various combinations of two goods and services that can be produced with fuller utilisation of a given level of resources in the most efficient way and with a given level of production technique.
A PPC is downward sloping curve that is concave to the origin. The downward sloping nature of the PPC is due to the law of increasing opportunity cost. According to this law, with the fuller utilisation of the given resources, in order to produce an additional unit of one good, some of the resources are to be withdrawn from the production of another good. This implies that for producing an extra unit of one good more and more units of other good are to be sacrificed.
In the above figure, consider the movement from point A to B. In order to produce one extra unit of Good X, 4 units of Good Y are to be sacrificed. Similarly, the movement from point D to E, 8 units of Good Y is to be sacrificed in order to produce an extra unit of Good X. This indicates the rising opportunity cost of producing Good X.
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संबंधित प्रश्न
Giving reason comment on the shape of production possibilities curve based on the following schedule:
| Good X (units) | Good Y (units) |
| 0 | 8 |
| 1 | 6 |
| 2 | 4 |
| 3 | 2 |
| 4 | 0 |
Giving reason, comment on the shape of Production Possibilities Curve based on the following table :
| Good X (units) | Good Y (units) |
| 0 | 4 |
| 1 | 3 |
| 2 | 2 |
| 3 | 1 |
| 4 | 0 |
Answer the following question.
Explain the meaning of opportunity cost with the help of a production possibility schedule.
Define flow variable.
Define flow variable.
What is a production possibility frontier?
Choose the correct alternative from given options:
In the given figure, the movement on the production possibility curve from point A to point B shows _____________.
Choose the correct alternative from given options:
Shift from Point A on Production Possibility Curve X1Y1 to point B on X2Y2 in the given figure indicates:
Fill up the blank.
A Production Possibility Curve (PPC) would be convex to the origin if the Marginal Rate of Transformation (MRT) is ___________.
Answer the following question.
Why is a Production Possibility Curve concave to the origin? Explain.
______ are economic units that carry out the production.
Production possibility curve slopes downwards from ______ to ______.
Which of the following is the result of increase in price of factors of production?
Which of the following statement is true:
The total output generated by the first four units of variable input is 200 units, 350 units, 450 units and 500 units. The marginal product of the third unit of input is:
