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If MOC increases, the shape of PPC will be
- a)Concave
- b)Inverted
- c)Convex
- d)Straight
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
If MOC increases, the shape of PPC will bea)Concaveb) Invertedc) Conve...
MOC refers to the number of units of a commodity sacrificed to gain one additional unit of another commodity. In case of PPF, MOC is always increasing, i.e. more and more units of a commodity have to be sacrificed to gain an additional unit of another commodity.PPF is concave shaped because of increasing marginal opportunity costs, i.e. more and more units of one commodity are sacrificed to gain an additional unit of another commodity.
Most Upvoted Answer
If MOC increases, the shape of PPC will bea)Concaveb) Invertedc) Conve...
Explanation:
MOC stands for Marginal Opportunity Cost, which is the cost of producing one extra unit of a product in terms of the opportunity cost of producing another product. When MOC increases, it means that it is becoming more costly to produce additional units of a product.
The PPC (Production Possibility Curve) is a graphical representation of the different combinations of two goods that can be produced using all available resources and technology. The shape of the PPC depends on the opportunity cost of producing one good in terms of the other.
When MOC increases, it means that more resources are required to produce additional units of a product, which leads to a decrease in the production of the other product. This leads to a concave shape of the PPC as it shows the increasing opportunity cost of producing one good in terms of the other.
Therefore, the correct answer is option 'A' - Concave.
Key Points:
- MOC stands for Marginal Opportunity Cost
- PPC is a graphical representation of the different combinations of two goods that can be produced using all available resources and technology
- When MOC increases, it leads to a concave shape of the PPC
- The concave shape shows the increasing opportunity cost of producing one good in terms of the other.
MOC stands for Marginal Opportunity Cost, which is the cost of producing one extra unit of a product in terms of the opportunity cost of producing another product. When MOC increases, it means that it is becoming more costly to produce additional units of a product.
The PPC (Production Possibility Curve) is a graphical representation of the different combinations of two goods that can be produced using all available resources and technology. The shape of the PPC depends on the opportunity cost of producing one good in terms of the other.
When MOC increases, it means that more resources are required to produce additional units of a product, which leads to a decrease in the production of the other product. This leads to a concave shape of the PPC as it shows the increasing opportunity cost of producing one good in terms of the other.
Therefore, the correct answer is option 'A' - Concave.
Key Points:
- MOC stands for Marginal Opportunity Cost
- PPC is a graphical representation of the different combinations of two goods that can be produced using all available resources and technology
- When MOC increases, it leads to a concave shape of the PPC
- The concave shape shows the increasing opportunity cost of producing one good in terms of the other.
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If MOC increases, the shape of PPC will bea)Concaveb) Invertedc) Convexd) StraightCorrect answer is option 'A'. Can you explain this answer?
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