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| 1. |
Explain PPC curved with it\'s property? |
| Answer» Thanks<br>The curve which shows the combinations of two goods and services that can be produced with fuller utilisation of a given amount of resources in the most efficient way and with a given production technology is called Production Possibility Curve. It is also known as Production Possibility Frontier (or PPF) and Transformation Curve. The following are the properties of a PPC.i.\xa0Concave to Origin:\xa0PPC curve is concave to the origin.\xa0This is because of the increasing opportunity cost i.e. in accordance with the law of increasing opportunity cost.ii.\xa0Increasing Marginal Rate of Transformation:\xa0The slope of PPC (MRT) shows, for the production of every additional unit of one good, more and more units of other good has to be sacrificed.\xa0In other words,\xa0as we move down along the PPC, the slope of PPC (or MRT) increases.iii.\xa0Downward Sloping:\xa0PPC curve is downward sloping as more production of one good is associated with the decline in production of the other good.iv.\xa0Optimum utilisation of resources:\xa0The points that lie on the Production Possibility Frontier are associated with full employment of resources and efficient utilisation of the available technology.\xa0 | |