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Question : A country produces two commodities: X and Y. Its production possibilities are shown in the following table:

Possibility A B C D E F
Commodity X 20 14 9 5 2 0
Commodity Y 0 1 2 3 4 5

The shape of PPF is _____________

Option 1: Convex

Option 2: Concave

Option 3: Constant

Option 4: None of these


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Convex


Solution :

Possibility A B C D E F
Commodity X 20 14 9 5 2 0
Commodity Y 0 1 2 3 4 5
MRT = Change in units sacrificed/Change in units gained -- 6:1 5:1 4:1 3:1 2:1

PPF is convex shaped due to decreasing MRT i.e. less and less units of commodity Y are sacrificed to gain an additional unit of commodity X. Hence, the correct answer is 1.

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