Question : Assertion: The marginal rate of transformation (MRT) measures the opportunity cost of producing one additional unit of a good.
Reason: MRT reflects the production possibilities curve (PPC) slope and shows the trade-off between two goods.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. The MRT represents the rate at which one good must be sacrificed to produce an additional unit of another good while keeping overall production constant. It reflects the opportunity cost of allocating resources from the production of one good to the production of another.
The reason provided is a correct explanation of the assertion. The production possibilities curve represents the maximum output combinations of two goods that can be produced given a fixed set of resources and technology. The slope of the PPC represents the MRT and reflects the trade-off between the two goods. As more of one good is produced, resources must be shifted away from the production of the other good, resulting in an increasing MRT.
Therefore, the correct answer is Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Question : Assertion: The production possibilities curve (PPC) illustrates the maximum combination of two goods that an economy can produce.
Reason: Any point inside the PPC represents inefficiency, while points outside the PPC are unattainable given the available resources.
Question : Assertion: The concept of marginal utility is only applicable in the case of discrete goods.
Reason: Marginal utility measures the additional satisfaction obtained from consuming an additional unit of a good.
Question : Assertion (A): The demand curve for the market is flatter than the demand curve for an individual.
Reason (R): By horizontally summing individual demand, the market demand curve is created.
Question : Assertion(A): Demand elasticity is greater than one below the demand curve's midpoint on a straight line with a downward slope.
Reason(R): The range of demand elasticity on a linear demand curve is zero to infinity.
Question : Assertion: Economic growth can shift outward the production possibilities curve (PPC)d.
Reason: Economic growth occurs when there is an increase in a country's resources or technological advancement.
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