Advertisements
Advertisements
Question
Answer the following question.
Why is a Production Possibility Curve concave to the origin? Explain.
Solution
PPC is concave to origin because of the increasing opportunity cost i.e. in accordance with the law of increasing opportunity cost. This suggests that as the production increases, to produce each additional unit of one good, more and more units of other good needs to be sacrificed. In other words, the opportunity cost increases.
APPEARS IN
RELATED QUESTIONS
Give the meaning and characteristics of production possibility frontier.
A large number of technical training institutions have been started by the government. State its economic value in the context of production possibilities frontier.
Giving reason, comment on the shape of Production Possibilities Curve based on the following table :
| Good X (units) | Good Y (units) |
| 0 | 20 |
| 1 | 18 |
| 2 | 14 |
| 3 | 8 |
| 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 _____________.
Fill up the blank.
A Production Possibility Curve (PPC) would be convex to the origin if the Marginal Rate of Transformation (MRT) is ___________.
______ are economic units that carry out the production.
Production possibility curve slopes downwards from ______ to ______.
Which of the following statement is true:
______ shows the functional relationship between output and cost of production.
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:
