Question : India 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 |
Calculate MRT for the possibility C.
Option 1: 5:1
Option 2: 4:1
Option 3: 6:1
Option 4: 2:1
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Answer (1)
19th Jan, 2024
Correct Answer: 5:1
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 | -- | 6:1 | 5:1 | 4:1 | 3:1 | 2:1 |
MRT for possibility C = 5:1.
Hence, the correct option is 1.
(MRT) = MCx / MCy
It is a ratio of the total cost of producing one extra unit of goods for marketing firm X, as indicated by the formula MCx, and the rate of production raised by slowing down the production of goods for another company Y, indicated by the formula MCy.
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