Is rising Marginal opportunity cost (MOC) is the assumption of PPC cur...
Ya moc rise due to the assumptions of ppc like fixed resource ,no any resource are effective in production of both commodity for this moc increase
Is rising Marginal opportunity cost (MOC) is the assumption of PPC cur...
**Is rising Marginal Opportunity Cost (MOC) an assumption of the PPC curve?**
Yes, rising Marginal Opportunity Cost (MOC) is an assumption of the PPC (Production Possibility Curve) curve. The PPC curve is a graphical representation of the different combinations of two goods that an economy can produce using its available resources and technology. It shows the trade-off between producing one good versus the other, given limited resources.
**Understanding Marginal Opportunity Cost:**
Marginal Opportunity Cost refers to the additional cost incurred by producing one additional unit of a good, measured in terms of the alternative good that must be given up. It represents the trade-off that occurs when an economy decides to produce more of one good and less of another.
**Rising MOC and the PPC Curve:**
The assumption of rising MOC on the PPC curve means that as an economy increases the production of one good, the opportunity cost of producing that good will also increase. This is because resources are not equally suited for the production of both goods and are better suited for one good over the other. As more resources are allocated to the production of a particular good, the economy must give up increasing amounts of the other good.
**Implications of Rising MOC:**
1. Concave Shape of the PPC: The assumption of rising MOC results in the concave shape of the PPC curve. This concavity reflects the increasing trade-off between the two goods as more resources are shifted from one to the other.
2. Limited Resources: Rising MOC indicates that resources are limited and not equally efficient in the production of both goods. It implies that there is a scarcity of resources and that the opportunity cost of producing more of one good is sacrificing the production of the other.
3. Efficient Allocation: The PPC curve assumes that resources are allocated efficiently, meaning the economy is producing a combination of goods that maximizes its output given the available resources. The rising MOC reflects the need to allocate resources appropriately to achieve this maximum output.
**Conclusion:**
In conclusion, rising MOC is indeed an assumption of the PPC curve. It highlights the increasing opportunity cost of producing one good as more resources are allocated to its production. The rising MOC is reflected in the concave shape of the PPC curve and emphasizes the trade-off and limited resources faced by an economy. Understanding this assumption is crucial for analyzing production decisions, resource allocation, and the efficiency of an economy.