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Giving reason comment on the shape of Production Possibilities curve based on the following schedule :{:("Good X (units)","Good Y (units)"),(0,8),(1,6),(2,4),(3,2),(4,0):} |
Answer» Solution :BASED on the below schedule, we can say that PPC is a downward sloping straight line. This is because the OPPORTUNITY cost of producing ONE good (i.e. Good X) in terms of ANOTHER (i.e. Good Y) REMAINS the same, that is, 2 (ignoring the minus sign). Thus, the shape of PPC is downward sloping straight line which can be attributed to the constant opportunity cost. |
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