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प्रश्न
Define Production Possibilities Curve. Explain why it is downward sloping from left to right.
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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utilisation of the given resources, in order to produce an additional unit of one good, some of the resources are to be withdrawn from the production of another good.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
Production in an economy is below its potential due to unemployment. Government starts employment generation schemes. Explain its effect using production possibilities curve.
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 |
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 | 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.
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:
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.
Which of the following statement is true:
______ shows the functional relationship between output and cost of production.
Which of the following statement is false?
