Q3 of 25 Page 1

A Production Possibility Curve would be _______ curve if all the available resources in an economy are equally efficient to produce both the goods. (Choose the correct alternative)

a. A straight line


b. Convex to origin


c. Concave to origin


d. Upward sloping

(c)

PPC is the concave curve which shows the combination of two commodities that an economy can produce with given limited resources and technology. It is also known as production transformation curve. The concavity of the PPC is because of the Marginal Rate of Transformation or Opportunity Cost.


More from this chapter

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1

State the reason why Total Variable Cost (TVC) curve and Total Cost (TC) curve are parallel to each other.

OR


State the reason behind U-shape nature of the Average Variable Cost curve.

 2

If the Total Revenue of a firm increases by Rs. 45,000 due to an increase in the sale of Good X from 50 units to 65 units, then marginal revenue will be _____________?

 4

Which of the following is a variable cost?

a. Salary of permanent staff


b. Rent of premises


c. License fees


d. Wages


OR


If Total Variable Cost and Total Fixed Cost of producing 10 units are 500 & 200, the value of the average cost would be?


a) 50


b) 70


c) 20


d) 80

 5

Distinguish between Normative Economics and Positive Economics, with suitable examples.

OR


Why do central problems arise? Discuss briefly.