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If MOC decreases, the shape of PPC will be
- a)Inverted
- b)Straight
- c)Convex
- d)Concave
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
If MOC decreases, the shape of PPC will bea) Invertedb) Straightc) Con...
PC can be convex to origin if MOC is decreasing, i.e. less and less unites of a commodity are sacrificed for gain of one additional unit.
Most Upvoted Answer
If MOC decreases, the shape of PPC will bea) Invertedb) Straightc) Con...
Explanation:
Impact of MOC on PPC:
- MOC stands for Marginal Opportunity Cost, which is the additional cost incurred when producing one more unit of a good.
- When MOC decreases, it means that fewer resources are needed to produce additional units of a good.
Shape of PPC:
- PPC stands for Production Possibility Curve, which shows the maximum possible combinations of two goods that can be produced with given resources and technology.
- The shape of the PPC depends on the opportunity cost of producing one good in terms of the other.
Convex Shape:
- When MOC decreases, the shape of the PPC will be convex.
- A convex shape indicates increasing opportunity costs as more of one good is produced, due to the resources being better suited for producing one good over another.
- This means that as more resources are allocated to producing a particular good, the opportunity cost of producing that good increases, leading to a convex shape of the PPC.
Impact of MOC on PPC:
- MOC stands for Marginal Opportunity Cost, which is the additional cost incurred when producing one more unit of a good.
- When MOC decreases, it means that fewer resources are needed to produce additional units of a good.
Shape of PPC:
- PPC stands for Production Possibility Curve, which shows the maximum possible combinations of two goods that can be produced with given resources and technology.
- The shape of the PPC depends on the opportunity cost of producing one good in terms of the other.
Convex Shape:
- When MOC decreases, the shape of the PPC will be convex.
- A convex shape indicates increasing opportunity costs as more of one good is produced, due to the resources being better suited for producing one good over another.
- This means that as more resources are allocated to producing a particular good, the opportunity cost of producing that good increases, leading to a convex shape of the PPC.
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If MOC decreases, the shape of PPC will bea) Invertedb) Straightc) Con...
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If MOC decreases, the shape of PPC will bea) Invertedb) Straightc) Convexd) ConcaveCorrect answer is option 'C'. Can you explain this answer?
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