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Giving Reason, Comment on the Shape of Production Possibilities Curve Based on the Following Table : - Economics

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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
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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.

Concept: Concepts of Production Possibility Frontier
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