Question
Define PPC. Explain why it is downward sloping from left to right.
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Answer
Production possibility curve, graphically, represents the various combinations of two goods which can be produced with a given amount of resources, assuming that the resources are fully employed and most efficiently used.
PPC slopes downward from left to right because resources are given and fixed, so increase in production of one commodity is possible only if production of another commodity is reduced.
PPC slopes downward from left to right because resources are given and fixed, so increase in production of one commodity is possible only if production of another commodity is reduced.
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