Introduction of Micro-Economics — Economics STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEconomicsIntroduction of Micro-Economics3 Marks
Question
Can a production possibility curve be a straight line? Explain.
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Answer
Yes, a production possibility curve can be a straight line, if marginal rate of transformation is constant. MRT is constant, if all the resources are equally efficient in production of all goods. But, this is not a common situation because resources are actually not equally efficient in the production of all goods. So, PPC is generally concave.
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