Class 12th Economics - Introductory Microeconomics Case Study Questions and Answers 2022 - 2023
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Introductory Microeconomics Case Study Questions With Answer Key
12th Standard CBSE
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Reg.No. :
Economics
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Every society has to determine how to allocate its scarce resources to different goods and services. An allocation of the scarce resources of the economy gives rise to a particular combination of different goods and services. "The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock oftechnical knowledge is called the Production Possibility Frontier of the economy". Given below is an example of an economy producing corn or cotton by using its resources. Table given shows the different combinations of corn and cotton that the economy can produce when its resources are fully utilised.
\(\begin{array}{|c|c|c|} \hline {\text { Production Possibilities }} \\ \hline \text { Possibilities } & \text { Corn } & \text { Cotton } \\ \hline \text { A } & 0 & \mathbf{1 0} \\ \text { B } & 1 & 9 \\ \text { C } & 2 & 7 \\ \text { D } & 3 & 4 \\ \text { E } & 4 & 0 \\ \hline \end{array}\)
(a) What is a 'Production Possibility Frontier'?
(b) If all the resources are used in the production of corn, how much is the maximum amount of corn that can be produced?
(c) If all the resources are used in the production of cotton, how much is the maximum amount of cotton that can be produced?
(d) When the given consumer moves from Possibility A to E, what does it indicate?(a)
Case Study
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Answers
Introductory Microeconomics Case Study Questions With Answer Key Answer Keys
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(a) The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technical knowledge is called the "Production Possibility Frontier" of an economy.
(b) 4 units of corn at the Possibility E.
(c) 10 units of cotton at the Possibility A.
(d) This movement of the given consumer from A to E indicates that he can have more of corn at the cost of less of cotton. This is on account of the allocation of its scarce resources available to different goods. An allocation of the scarce resources of the economy gives rise to a particular combination of different goods and services, as shown by the various possibilities from A to E.