Meaning: The production possibility curve is the curve which represents all those combinations of two commodities that can be produced with full utilization of resources in the most efficient way, which give the same level of satisfaction to a consumer.
Properties of PPC:
When price of a commodity X falls by 10 per cent, its demand rises from 150 units to 180 units. Calculate its price elasticity of demand. How much should be the percentage fall in its price so that its demand rises from 150 to 210 units ?
Show that demand of a commodity is inversely related to its price.
Explain with the help of utility analysis.
Why is an indifference curve negatively sloped? Explain.
As we move along a downward sloping straight line demand curve from left to right, price elasticity of demand : (choose the correct alternative)
(a) remains unchanged
(b) goes on falling
(c) goes on rising
(d) falls initially then rises
The demand of a commodity when measured through the expenditure approach is inelastic. A fall in its price will result in :
(choose the correct alternative)
(a) no change in expenditure on it.
(b) increase in expenditure on it.
(c) decrease in expenditure on it.
(d) any one of the above
Complete the following table :
|output units||total cost||average variable cost||marginal cost||average fixed cost|
Average revenue and price are always equal under : (choose the correct alternative)
(a) perfect competition only
(b) monopolistic competition only
(c) monopoly only
(d) all market forms