ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods.

Detailed explanation-2: -The law of increasing opportunity cost is the concept that as you continue to increase production of one good, the opportunity cost of producing that next unit increases. This comes about as you reallocate resources to produce one good that was better suited to produce the original good.

Detailed explanation-3: -Answer and Explanation: The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the a. Amount of the other good that must be given up. The opportunity cost in general is the lost gain from the alternative use of resources that are currently in use.

Detailed explanation-4: -The slope of a budget constraint always shows the opportunity cost of the good that is on the horizontal axis. If Charlie has to give up lots of burgers to buy just one bus ticket, then the slope will be steeper, because the opportunity cost is greater.

Detailed explanation-5: -Each curve has a different shape, which represents different opportunity costs. The bowed out (concave) curve represents an increasing opportunity cost, the bowed in (convex) curve represents a decreasing opportunity cost, and the straight line curve represents a constant opportunity cost.