Explain Mrt With The Help Of Schedule And Graph.
Answers
Answer:
Schedule Representation:
Let us assume that two commodities are to be produced say, cloth and wheat. If all the resources are put to produce cloth, then the maximum of cloth will be produced per year, depending on the quantitative and qualitative resources and the technological efficiency. Let us, now further suppose that within the existing conditions only 5 million meters of cloth can be produced, with all the resources at our command.
Alternatively, if all the resources are used for the production of wheat, we can produce 15 million tonnes of food grains. In between these two extreme possibilities, there are many other alternatives. Thus we shall have to scarcities one for the other. This fact is clear from the Table No. 1.
With the help of above table, we can show production possibility curve in respect of cloth and wheat. Economy can produce maximum 5 million metres of cloth or 15 million quintals of wheat. In Fig. 1, on OX axis, we have measured cloth in million metres while on OY axis; we have taken wheat in million quintals.
Diagramme Representation of Production Possibility Curve
The concave curve AF shows the join of various possible combinations which gives a curve known as transformation curve or production possibility frontier. Each production possibility curve is the locus of output combination which is obtained from given factors or inputs. Similarly B, C, D and E show the different combinations for two different goods i.e. cloth and wheat. The economy has to choose out of these various combinations, which can be produced by existing resources and technology. They are also known as ‘Technologically Efficient’ or ‘Optimum Product Mix’. Here we should remember that any combination beyond AF curve does not possess sufficient resources.
