Practicing Success

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 schedule shows that marginal opportunity cost of producing more of good A in place of good B does not change. Thus, PPC should be a downward sloping straight line. Generally, due to increasing marginal rate of transformation the shape of the PPC is concave to origin.