Q.1. How PPC can solve central problems of an Economy & Draw PPC Showing the following situations– growth of resources
Answers
Answer:
PPC refers to Production Possibility Curve. As we know central problem deals with the production and allocation problems related to the resources so we can infer that it solves the central problem of an economy by the production of two goods using sufficient resources and technology.
Answer:
Concept:
The PPC (Production Possibility Curve) shows the combination of two goods produced in an economy with the given resources.
To find:
PPC's theory of solving central problems. to show effect of growth of resources on PPC.
Concept:
The Production Possibility Curve is a convex shaped curve which represents the combination of production of goods in an economy. It utilizes the given resources and technology for the production of two goods.
PPC helps in solving the central problem by allocation of resources and technology towards the production of goods. Resources are appropriately allocated.
Due to growth of resources, we have more capacity of production in the economy and hence the PPC curve would shift to the right.
