Advertisements
Advertisements
Question
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 |
Solution
Based on the below schedule, we can say that PPC is a downward sloping straight line. This is because the opportunity cost of producing one good (i.e. Good X) in terms of another (i.e. Good Y) remains the same, that is, 1 (ignoring the minus sign).
| Good X (units) | Good Y (units) | Opportunity Cost |
| 0 | 4 | - |
| 1 | 3 | 1 |
| 2 | 2 | 1 |
| 3 | 1 | 1 |
| 4 | 0 | 1 |
The following figure depicts the shape of PPC.
Thus, the shape of PPC is downward sloping straight line which can be attributed to the constant opportunity cost.
APPEARS IN
RELATED QUESTIONS
Production in an economy is below its potential due to unemployment. Government starts employment generation schemes. Explain its effect using production possibilities curve.
Give the meaning and characteristics of production possibility frontier.
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 | 20 |
| 1 | 18 |
| 2 | 14 |
| 3 | 8 |
| 4 | 0 |
Define Production Possibilities Curve. Explain why it is downward sloping from left to right.
Define flow variable.
What do you mean by the production possibilities of an economy?
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:
______ 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:
