Which among the following is not true about production possibility curve :
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This question was previously asked in
Shift 09/06/2023 3:30 PM - 6:30 PM
A
PPC is upward sloping
B
PPC is concave to its origin
C
PPC may be convex to its origin
D
PPC may be straight line downward sloping
Correct Answer
PPC is upward sloping
Detailed Explanation
- The production possibility curve (PPC) is a graphical representation of the possible combinations of two goods that an economy can produce with the given resources and technology. The curve typically has a negative slope, indicating that there is an opportunity cost associated with producing more of one good over another.
- When one good is produced more, the production of the other must be reduced.
The reason why option (1) is incorrect, stating that the PPC is upward sloping, is that an upward-sloping PPC would imply that an increase in the production of one good does not require a reduction in the production of another good, which contradicts the basic principle of the production possibility curve.
Therefore, the statement (1) is not true about the production possibility curve.
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