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PPC is a mathematical tool for an economy to solve:
  • a)
      Economic problems of an individual 
  • b)
      Scarcity problems of an economy
  • c)
      Distribution problems of the resources 
  • d)
    Central problems of an economy
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
PPC is a mathematical tool for an economy to solve:a) Economic problem...
Factors such as labor, capital and technology, among others, will affect the resources available, which will dictate where the production possibility frontier lies. The PPF is also known as the production possibility curve or the transformation curve.
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PPC is a mathematical tool for an economy to solve:a) Economic problem...
Economic problems of an individual:
PPC (Production Possibility Curve) is not specifically designed to solve the economic problems of an individual. It is a macroeconomic tool that focuses on the entire economy rather than individual economic agents.

Scarcity problems of an economy:
While PPC is related to scarcity problems in the economy, it is not specifically designed to solve these problems. Scarcity is a fundamental economic problem that arises due to limited resources and unlimited wants. PPC represents the different combinations of goods and services that can be produced given the available resources and technology. It helps in illustrating the trade-offs and opportunity costs involved in allocating scarce resources, but it does not provide a direct solution to scarcity problems.

Distribution problems of the resources:
PPC does not directly address the distribution problems of resources in an economy. Distribution is concerned with how resources, income, and wealth are allocated among individuals or groups. PPC focuses on the production possibilities of an economy based on its available resources and technology, but it does not tackle the distributional aspects.

Central problems of an economy:
The correct answer is option 'D': Central problems of an economy. PPC is a mathematical tool used to solve the central problems of an economy. The central problems of an economy include what to produce, how to produce, and for whom to produce. PPC helps in determining the optimal allocation of resources and the production mix by illustrating the trade-offs between different goods and services. It assists in making decisions about the most efficient use of resources, the choice of production techniques, and the distribution of goods and services in the economy.

Overall, PPC is primarily used as a tool to analyze and solve the central problems of an economy rather than addressing the economic problems of an individual, scarcity problems, or resource distribution problems.
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Read the following passage and answer the questions that follow: At the micro level, every economy faces three central problems, i.e., what to produce, how to produce and for whom to produce.What to Produce : The problem of ‘what to produce’ arises as the producers have limited resources. In an economy because of scarcity of resources, producers are unable to produce everything in bulk but they will have to make a choice as to which one is important as a whole so that limited resources can be rationally managed. Problem of ‘what to produce’ involves two-fold decisions : the kind of goods to be produced and the quantity of goods to be produced.How to Produce : It is concerned with how to organise production. This problem is related to the choice of technique of production. It arises due to the availability of various techniques for the production of a commodity such as Labour– Intensive Technique and Capital–Intensive Technique.For Whom to Produce : The problem of ‘for whom to produce’ is the problem of distribution of produced goods and services. At the micro level, the decision relates to different sets of buyers in the economy. In an economy, producers would obviously be inclined to produce more for the rich buyers to maximise their profits but, the government also intervenes to regulate the use of resources, so that enough production is done for the poorer sections of the society also.Q. The problem of ..................... is the problem of distribution of produced goods and services.

Read the following passage and answer on the basis of the same :The subject-matter of economics is divided into two major branches—Microeconomics and Macroeconomics. Microeconomics studies the economic behaviour of individual economic units and individual economic variables, whereas macroeconomics deals with the functioning of the economy as a whole. Macroeconomics dealswith the broad economic aggregates or bigger issues, such as full employment, unemployment, full capacity, under capacity production, inflation or deflation, etc. Macroeconomics is concerned with the theory of national income, employment, aggregate consumption, savings and investment, general price level, economic growth, etc. Whereas, microeconomics is concerned with the theory of product pricing, factor pricing and consumer behaviour, etc.Positive economics is the branch of economics that concerns the description and explanation of economic phenomena. It focuses on facts and cause and effect behavioural relationships and includes the development and testing of economic theories. Positive economics is objective and facts based. Whereas normative economics is a part of economics that expresses value or normative judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be. Normative economics is subjective and value based.For example, the statement, “government-provided healthcare increases public expenditures” is a positive economic statement and the statement, “government should provide basic healthcare to all citizens” is a normative economic statement.Q. Macroeconomics is concerned with the theory of national income, employment, aggregate consumption, savings and investment, general price level, economic growth.

Read the following passage and answer on the basis of the same : The subject-matter of economics is divided into two major branches—Microeconomics and Macroeconomics. Microeconomics studies the economic behaviour of individual economic units and individual economic variables, whereas macroeconomics deals with the functioning of the economy as a whole. Macroeconomics dealswith the broad economic aggregates or bigger issues, such as full employment, unemployment, full capacity, under capacity production, inflation or deflation, etc. Macroeconomics is concerned with the theory of national income, employment, aggregate consumption, savings and investment, general price level, economic growth, etc. Whereas, microeconomics is concerned with the theory of product pricing, factor pricing and consumer behaviour, etc.Positive economics is the branch of economics that concerns the description and explanation of economic phenomena. It focuses on facts and cause and effect behavioural relationships and includes the development and testing of economic theories. Positive economics is objective and facts based. Whereas normative economics is a part of economics that expresses value or normative judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be. Normative economics is subjective and value based.For example, the statement, “government-provided healthcare increases public expenditures” is a positive economic statement and the statement, “government should provide basic healthcare to all citizens” is a normative economic statement.Assertion (

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PPC is a mathematical tool for an economy to solve:a) Economic problems of an individualb) Scarcity problems of an economyc) Distribution problems of the resourcesd)Central problems of an economyCorrect answer is option 'D'. Can you explain this answer?
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