Match the following:

1-C, 2-A, 3-B, 4-D

The correct answer is Option 3: 1-C, 2-A, 3-B, 4-D

1. Production possibility curve - C. Transformation curve
2. Marginal rate of technical substitution - A. Marginal opportunity cost
3. Increase in resources -B. Shift in PPC
4. Improvement in technology used for 1 product out of 2 products - D. Rotation in PPC

1. Production possibility curve (PPC) is also known as transformation curve. It represents the maximum output combinations of two goods that an economy can produce with its given resources and technology. It shows the transformation of resources from producing one good to another. Hence, it matches with "Transformation curve" (Option C).

2. Marginal rate of technical substitution (MRTS) refers to the rate at which one input can be substituted for another input in the production process while keeping the output constant. The curve is concave to the origin due to diminishing marginal rate of transformation which is also known as diminishing marginal opportunity cost. Hence, it matches with "Marginal opportunity cost" (Option A).

3. Any change in the PPC can be seen if there is changes seen in the resources of the country or technology which is being used. Thus, increase in the resources will lead to a rightward shift in the PPC. Option B.
4. Improvement in technology of one product (out of 2 products) would lead to an increase in output of that product only, resulting an outward rotation of the PPC. Option D