A country produces two commodities: X and Y. Its production possibilities are shown in the following table: (a) Calculate marginal rate of transformation (MRT) (b) Construct a PPF with the help of the various possibilities, (c ) Comment on the shape of PPF along with its reason.

A country produces two commodities: X and Y. Its production possibilit

1.	A country produces two commodities: X and Y. Its production possibilities are shown in the following table: (a) Calculate marginal rate of transformation (MRT) (b) Construct a PPF with the help of the various possibilities, (c ) Comment on the shape of PPF along with its reason.
Answer» Solution :(a) (b) Figure 1.13 (c ) PPF is convex shaped DUE to decreasing MRT, i.e., LESS and less units of COMMODITY Y are sacrificed to gain an additional UNIT of commodity X.