Which of the following is true?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → PPC is downward sloping curve
The production possibility curve (PPC) shows the combinations of two goods that an economy can produce when its resources are fully used.
Resources are limited. If more of them go into producing one good, less is left for the other. So more of one good always means less of the other, and the curve slopes downward at every point.
NCERT (2026-27): “Production Possibility Frontier … If all the resources are used in the production of corn, the maximum amount of corn that can be produced is 4 units and if all resources are used in the production of cotton, at the most, 10 units of cotton can be produced. The economy can also produce 1 unit of corn and 9 units of cotton or 2 units of corn and 7 units of cotton or 3 units of corn and 4 units of cotton. There can be many other possibilities. The figure illustrates the production possibilities of the economy. Any point on or below the curve represents a combination of corn and cotton that can be produced with the economy’s resources. The curve gives the maximum amount of corn that can be produced in the economy for any given amount of cotton and vice-versa. This curve is called the production possibility frontier.… …If more of the scarce resources are used in the production of corn, less resources are available for the production of cotton and vice versa. Therefore, if we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone.…”
Production Possibility Frontier |
