Question

In which situation PPF shifts towards right?
(a) Increase in foreign capital
(b) Resources are reduced
(c) Fully efficient use of resources
(d) Increase in employment
When can a Production Possibility Frontier be a straight line?
(a) Decrease in production of both goods
(b) More of both goods can be produced
(c) All resources are equally efficient in production of both goods
(d) All resources are not equally efficient in production of both goods.
Which of the following is an assumption of PPF?
(a) Available Resources are fully and efficiently utilized
(b) Technology remain stable
(c) Resources are not equally efficient in production of all goods
(d) All of the above
Which of these statement is correct about Opportunity cost?
(a) Opportunity cost is always higher than the given price.
(b) Opportunity cost is always less than the given price.
(c) Opportunity cost is always calculated in money.
(d) Opportunity cost can be less than, more than or equal to given price​

Answer 1

Answers are given below.

Explanation:

1- PPF shifts towards the right when there is a fully efficient use of resources.

2- When all resources are not equally efficient in the production of both goods the there is the possibility of the Production Possibility Frontier to be a straight line.

3- Available Resources are fully and efficiently utilized.

4- Opportunity cost can be less than, more than or equal to the given price​.