What is meant by production possibility curve? Illustrate with the help of a table and diagram.

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Solution

Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.

Guns (Units) Bread (Units) Marginal Opportunity Cost
0 30 −
1 28 2
2 24 4
3 18 6
4 10 8
5 0 10

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