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The basic assumption regarding resources while drawing a PPC is
  • a)
    Resources can be put to a particular use
  • b)
    Resources depend on the kind of goods produced
  • c)
    Resources are unlimited
  • d)
    Resources are constant and given
Correct answer is option 'D'. Can you explain this answer?
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The basic assumption regarding resources while drawing a PPC isa)Resou...
Explanation:

PPC or Production Possibility Curve is a graphical representation of all possible combinations of two goods that an economy can produce with the given resources and technology.

The basic assumption regarding resources while drawing a PPC is that resources are constant and given.

This means that:

- The quantity and quality of resources available in the economy remain the same during the period under consideration.
- The technology or production techniques used to produce the goods also remain the same.
- The economy is assumed to be operating at full employment, meaning all available resources are being utilized efficiently.
- There is no external interference or changes in the economy, such as natural disasters, changes in government policies, etc.

This assumption is necessary because it simplifies the analysis of the production possibilities of an economy and helps in understanding the trade-offs involved in producing one good over the other.

If resources were not constant and given, the PPC would shift, and the analysis would become more complex.

Therefore, the assumption that resources are constant and given is a fundamental assumption while drawing a PPC.
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The basic assumption regarding resources while drawing a PPC isa)Resou...
Because resources are limited by use other resources by optimum utilisation of resources and human wants are unlimited
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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.

Direction: Read the following passage and answer the question that follows:Law of Supply states that, other things being equal, quantity supplied increases with increase in price and decreases with decrease in price of a commodity.Assumptions of Law of Supply : The Law of Supply assumes the following as constant:(i) Price of all related goods(ii) Prices of input factors of production(iii) Technique of production(iv) Goals of the producer(v) Policies of the government(vi) Expectations about the marketExceptions to the Law of Supply: Agricultural Produce: The supply of agricultural produce cannot be increased with increase in prices because of limitation of agricultural land and the time involved in producing a fresh crop. Also, it is more season dependent. On the other hand, most of the agricultural produce like fruits and vegetables is perishable in nature. This is why, their supply cannot be reduced with decrease in prices.Supply of a Labour: The supply of labour is an exception to the law of supply. Initially, the supply of labour follows the law of supply, that is, with an increase in wage rate, there is an increase in supply of labour. But beyond a certain wage rate, the labour prefers to have some relaxed hours. The workers can maintain the same standard of living by working for fewer hours at higher wage rates. As a result, beyond that wage rate, the supply of labour starts falling. As a result, the supply curve of labour is backward bending.Q. Which of the following is not the assumption of supply?

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The basic assumption regarding resources while drawing a PPC isa)Resources can be put to a particular useb)Resources depend on the kind of goods producedc)Resources are unlimitedd)Resources are constant and givenCorrect answer is option 'D'. Can you explain this answer?
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