12th Class Economics Solved Paper - Economics 2015 Outside Delhi Set-III

  • question_answer
    Giving reason comment on the shape of Production Possibilities Curve based on the following table:
    Good X (units) Good Y (units)
    0 10
    1 9
    2 7
    3 4
    4 0


    Based on the below schedule, we can say that PPC is concave to origin. This is because as the production increases, to produce each additional unit of Good X, more and more units of Good Y need to be sacrificed. In other words, the opportunity cost of producing one good in terms of another increases.
    Good X (units) Good Y (units) Opportunity Cost
    0 10 ?
    1 9 1
    2 7 2
    3 4 3
    4 0 4
                The following figure depicts the shape of PPC.
                Thus, the shape of PPC is concave which can be attributed to the law of increasing opportunity cost.

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