Question

HELLO!

Question:

Explain the terms Marginal Opportunity Cost and Production Possibility Curve in the simplest language to help me understand.

Plz help...
it's urgent....
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Answer 1

heya!

production possibility curve (PPC) - ppc is the combination of any two goods that an economy can produce with full utilization of resources ND every point at ppc indicates resources are full utilised.

Marginal opportunity cost (MOC) -moc is defined as the no of units of goods sacrificed to increase the production of the other good by 1unit. so so if the moc of X is 5 this means that 5 units of Y sacrificed in order to produced one units of X. this concept is pure logic coz if u think about it the production who r efficient in production of will not be efficient in production of X, therefore more n more people will need to shift from y to X thereby reducing the units of y.

hope this help!! thanku ^_^

Answer 2

Production possiblity curve is a curve which shows different combination of output of two goods. It is understood that resources has been fully utilised and Technology is constant.

PPC curve rotates rightward due to two basic assumption:-

1. Increase in resources.
2. Change in technology of both the goods & vice-versa.

Ppc curve rotates if there is change in technology of a single goods.

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MOC(Marginal opportunity cost) = MOC is the rate at which output in use1(goods y) is lost for every additional unit of output on use2(goods x).

Simply, It shows the loss of 1 output due to increase in additional unit of output

formula= MOC= LOSS OF OUTPUT/GAINS OF OUTPUT.


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(as i solved it earlier).