Production Possibility Curve
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Any point inside the production possibility curve indicatesMarks:1
underutilisation of resources.
Explanation:Any point inside the PPC indicates underutilisation of resources and any point on the PPC indicates full and efficient utilisation of resources.
In case of natural calamity, PPC willMarks:1
Explanation:A natural calamity will lead to destruction of resources; hence, PPC will shift leftwards.
Production possibilities schedule is made with the assumption thatMarks:1
resources are used fully and efficiently.
Production possibility schedule or production possibility curve is based on the assumption of two commodities, given quantity of resources, constant technology and fuller and efficient utilisation of resources.
The shape of PPC convex to the origin impliesMarks:1
decreasing marginal opportunity cost.
Explanation:If the marginal opportunity cost decreases along the PPC then the PPC will be convex to the origin. In the normal situation PPC is concave to the origin.
An increase in the productivity of workers in an economy will cause the PPC toMarks:1
An increase in productivity of workers will result in growth of resources in the economy. Thus, the PPC will shift to the right.