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Home Questions DQ4UURZ5X2
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Read the following statements - Assertion (A) and Reason (R):
Assertion: Production possibility frontier is concave to the origin.
Reasoning: The marginal rate of transformation increases when we move on the PPC downwards.
From the given alternatives choose the correct one:

Options:

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true but Reason (R) is false.

Assertion (A) is false but Reason (R) is true.

Correct Answer:

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Explanation:

The amount of one commodity to be sacrificed keeps on increasing in order to produce each successive unit of another commodity. That is, the rate of sacrifice is increasing or MRT (Marginal rate of transformation) is increasing, which in turn makes PPC concave in shape.

 

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