Q1 of 38 Page 1

A production possibility curve (PPC) would be concave to the origin if marginal opportunity cost is : (Choose the correct alternative)

A. Increasing


B. Decreasing


C. Constant


D. Negative


OR


In the given figure X1, Y1 and X2, Y2 are production possibility frontiers for a hypothetical economy in two different time periods,


Period 1 and Period 2. A1 and A2, represent actual outputs in Period 1 and Period 2 respectively. P1 and P2, represent potential outputs in Period 1 and Period 2 respectively.



The economic growth over the two periods would be represented by movement from : (Choose the correct alternative)


A. P1 to P2


B. A1 to A2


C. A1 to P1


D. A2 to P2


A


A production possibility curve (PPC) would be concave to the origin if marginal opportunity cost is increasing.


OR


Answer: B


Production possibility frontier is a curve which depicts all the possible combinations of two goods which can be produced with given resources and technology in an economy. The economic growth over the two periods would be represented by a movement from A1 to A2.


More from this chapter

All 38 →
2

The marginal product curve in the input-output plane looks like ____________ : (Choose the correct alternative)

 3

If the percentage change in quantity supplied of commodity X is more

then the percentage change in the price of the commodity X, the coefficient


of price elasticity of supply would be _______________ : (Choose the correct alternative)


 4

If the average fixed cost of producing 4 units of output is < 60, then thevalue of total fixed cost for producing 5 units will be _____________ . (Fill up the blank)

OR


State any two examples of variable cost.


 5

Explain briefly the central problem of ‘‘What to produce’’.