Question

When some resources are shifted from Use-$1$ to Use-$2$ (given technology and resources), the marginal rate of transformation _____________, as per the concept of PPC.

• A. increases
• B. decreases
• C. remains constant
• D. is zero

Answer 1

Answer: (A)

increases

When some resources are shifted from Use-1 to Use-2( given technology and resources) the marginal rate of transformation increases, as per the concept of Production possibility curve.Since resources are use specific, therefore every time when one more unit of a commodity is produced more units of the other commodity is sacrificed that results in increasing marginal opportunity cost or marginal rate of transformation.