question_answer

Find out Marginal Opportunity Cost (MOC) of good X in the following schedule and also comment on the probable shape of the production possibility curve.

Production of Goods X (units)	Production of Good Y (units)
0	15
1	14
2	12
3	9
4	5
5	0

Answer:

Production of Good X(units)	Production of Good Y (units)	Marginal Opportunity Cost (MOC)
0	15	\[-\]
1	14	\[\frac{1}{1}=1\]
2	12	\[\frac{2}{1}=2\]
3	9	\[\frac{3}{1}=3\]
4	5	\[\frac{4}{1}=4\]
5	0	\[\frac{5}{1}=5\]

Marginal Opportunity Cost (MOC) = \[\frac{Loss\,\,of\,\,Output\,\,of\,\,Y\,\,(\Delta Y)}{Gain\,of\,\,Output\,\,of\,\,X\,\,(\Delta X)}\]                                                                       Since, MOC is rising, therefore Production Possibility Curve (PPC) will be concave to origin.