Question : Production Possibility Curve (PPC) is concave shaped because

Option 1: Marginal Rate of Transformation (MRT) is increasing.

Option 2: More of one good can be produced only by taking resources away from the production of another good.

Option 3: Both 1 and 2

Option 4: None of the above

Question : Why does Production Possibility Curve slope downward?

Option 1: More of one good can be produced only by taking resources away from the production of another good.

Option 2: Less of one good can be produced only by taking resources away from the production of another good.

Option 3: More of one good can not be produced only by taking resources away from the production of another good.

Option 4: None of the above

Question : The other name of Production Possibility Curve is _____________.

Option 1: Production Possibility Boundary

Option 2: Transformation Curve

Option 3: Transformation Boundary

Option 4: All of the above

Question : The indifference curve's slope is calculated using:

Option 1: Marginal Rate of Substitution

Option 2: Marginal Opportunity Cost

Option 3: Marginal Rate of Transformation

Option 4: None of these

Question : Statement 1: The marginal rate of transformation (MRT) measures the rate at which one good can be exchanged for another along the PPC.

Statement 2: The MRT is constant along the entire PPC.

Option 1: Statement 1 is true, and statement 2 is false.

Option 2: Statement 1 is false, and statement 2 is true.

Option 3: Both statements 1 and 2 are true.

Option 4: Both statements 1 and 2 are false.

Question : Statement 1: The marginal rate of transformation (MRT) indicates the opportunity cost of producing one more unit of a good in terms of the other good.

Statement 2: The MRT is constant along the PPC, assuming a linear production possibilities curve.

Option 1: Statement 1 is true, and statement 2 is false.

Option 2: Statement 1 is false, and statement 2 is true.

Option 3: Both statements 1 and 2 are true.

Option 4: Both statements 1 and 2 are false.