question_answer

Show the impact of simultaneous change in technology of both the goods on the transformation curve.

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Explain the concept of microeconomics and macroeconomics.

 

Answer:

Due to simultaneous change in the technology of both the goods, the transformation or the production possibility curve will shift either leftwards or rightwards as is explained below. (i) The production possibility curve will shift rightwards if there is improvement in the technology of production for both the goods. (ii) The production possibility curve will shift leftward if there is degradation in the technology of production for both the goods.                            Good X Shift in Production Possibility Curve Or (i) Microeconomics It refers to the branch of economics which deals with economic issues at the level of an individual. Microeconomics focuses on the action of individuals and firms like the interaction between buyers and sellers, borrowers and lenders etc. Examples of microeconomic study are; [a] Theory of consumer behaviour [b] Theory of price, etc                     (ii) Macroeconomics It refers to the branch of economics which deals with economic issues at the level of an economy as a whole. Macroeconomics takes a broader view by analysing economic activity of an entire country. Examples of macroeconomic study are: [a] Theory of equilibrium level of output and employment [b] Theory of investment multiplier