Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

What will be the shape of the PPC in the table below?

Good A (units) 0 10 20 30 40
Good B (Units) 40 30 20 10 0
Options:

Concave

Convex

Straight line

Can be of any shape

Correct Answer:

Straight line

Explanation:

the correct answer is Option 3: Straight line

The table provided shows that as production of Good A increases by a constant amount (10 units), the production of Good B decreases by an equal amount (10 units). This indicates a constant opportunity cost for producing both goods, meaning that the economy gives up the same quantity of Good B to produce an additional quantity of Good A at every point.

In such a case, the Production Possibility Curve (PPC) would be a straight line, reflecting constant opportunity costs.