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The basic assumption regarding resources while drawing a PPC is
  • a)
      Resources depend on the kind of goods produced
  • b)
      Resources can be put to a particular use
  • c)
      Resources are constant and given
  • d)
      Resources are unlimited
Correct answer is option 'C'. Can you explain this answer?
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The basic assumption regarding resources while drawing a PPC isa) Reso...
Since human wants are unlimited and the means to satisfy them are limited, every society is faced with the fundamental problem of choosing and allocating its scarce resources among alternative uses. The production possibility curve or frontier is an analytical tool which is used to illustrate and explain this problem of choice.
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The basic assumption regarding resources while drawing a PPC isa) Reso...
Assumption regarding resources while drawing a PPC

The PPC or Production Possibility Curve is a graphical representation of the maximum output combinations that can be produced with the given resources and technology. The basic assumption regarding resources while drawing a PPC is:

Resources are constant and given.

Explanation:

Resources refer to the factors of production such as land, labor, capital, and entrepreneurship that are used to produce goods and services. The assumption that resources are constant and given means that:

- The quantity and quality of resources available for production are fixed and cannot be increased or decreased in the short run.
- The resources are fully employed and allocated efficiently to produce goods and services.
- The technology used in production is also constant, and there are no improvements or innovations in the production process.

This assumption is necessary to draw the PPC because it helps to simplify the analysis and focus on the trade-offs between different goods that can be produced with the given resources. It also assumes that the economy is operating at full employment and there is no unemployment or idle resources.

Conclusion:

In conclusion, the basic assumption regarding resources while drawing a PPC is that resources are constant and given. This assumption helps to analyze the trade-offs between different goods that can be produced with the given resources and technology. It is important to note that this assumption may not hold in the long run, as resources can be increased or decreased through investments, innovation, and technological progress.
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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.

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The basic assumption regarding resources while drawing a PPC isa) Resources depend on the kind of goods producedb) Resources can be put to a particular usec) Resources are constant and givend) Resources are unlimitedCorrect answer is option 'C'. Can you explain this answer?
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