question_answer

State the conditions in which the production possibility curve can rotate outwards. Or Explain the major differences between the two branches of economics.          

Answer:

 The production possibility curve will rotate outward under the following two conditions:               (i) Improvement in technology in favour of one commodity,                                       (ii) Growth of resources for the production of one commodity,                                     When the technology is improved or there is a growth of resources for commodity X, PPC rotates from aq to\[a{{q}_{1}}\] as this will raise the productivity of X. When the technology is improved on there is a growth of resources for commodity Y. PPC rotates from aq to \[{{a}_{1}}q\]as this will raise the productivity of Y. Or The two branches of economics are microeconomics and macroeconomics. Difference between microeconomics and macroeconomics are:

Basis	Microeconomics	Macroeconomics
Meaning	It is that branch of economics which studies individual economic variables like demand, supply, price, etc.	It is that branch of economics which studies aggregate economic variables like aggregate demand/supply, price level, etc.
Basic parameter	The basic parameter of microeconomics is prices.	The basic parameter of macroeconomics in national income.
Scope	Since, it operates on individual level, it has a narrow scope.	Since, it operates with a high degree of aggregation, it has a very wide scope.