ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Key features of the PPC Two axes: each axis represents a good that a country produces, such as capital goods and consumer goods.
Detailed explanation-2: -Point out that, in this graph, units of capital goods are on the Y axis and units of consumer goods are on the X axis. Capital goods are man-made goods that are used in the production of goods and services. So, anything that serves as a tool is a capital good.
Detailed explanation-3: -The production possibility curve is based on the following Assumptions: (1) Only two goods X (consumer goods) and Y (capital goods) are produced in different proportions in the economy. (2) The same resources can be used to produce either or both of the two goods and can be shifted freely between them.