Question

assume that a PPF for butter and guns is drawn so that it is a straight line. It means:

Less and less units of butter are sacrificed to gain an additional unit of gun.

More and more units of butter are sacrificed to gain an additional unit of gun.

Same units of butter are sacrificed to gain an additional unit of gun.

(a) (b) (c) (d) None of these​

Answer 1

Answer:

C

Explanation:

C. PPC can be a straight line if we assume that MRT is constant i.e same amount of a commodity is sacrificed to gain an additional unit of another commodity. It is possible only when we assume that all the resources are equally efficient in production of all goods. In such case ppf will be a straight line.

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