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Question
The given slope of the PPC is attributed to __________.
The given slope of the PPC is attributed to __________.
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Solution
The correct option is C both (a) and (b)
The slope of
production possibility curve is the marginal opportunity cost which refers to the
additional sacrifice that an economy makes when they shift resources and technology
from the production of one commodity to the other. Since resources are used specific, therefore every time when one more unit of product X is produced, more units of the product Y are sacrificed that results in increasing
marginal/opportunity cost.
The slope of production possibility curve is the marginal opportunity cost which refers to the additional sacrifice that an economy makes when they shift resources and technology from the production of one commodity to the other. Since resources are used specific, therefore every time when one more unit of product X is produced, more units of the product Y are sacrificed that results in increasing marginal/opportunity cost.
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