Question

Q1: explain the following :

a) Do you think that the pure market economy in these circumstance of COVID-19 play an rffective role in economy? mention four evidences from your point

of view.idenovo

b) The production possibilities frontier curves show the concepts of scarcity, choice, opportunity
cost, efficiency and economic growth. Discuss with examples.

please help me with this Q with clear explain (all part).

Answer 1

Ans 'B' Part

• Concept of scarcity : It is the study of the production and distribution of goods and services to satisfy humans’ finite wants and needs with scarcity resources.

The Production Possibility Frontier-PPF is generated because of the Law of Scarcity. It is a curve representing all maximum output possibilities of two different goods, given a set of inputs consisting of resources and other factors which are finite in nature.

• Choice : A production possibility frontier defines the set of choices society faces for the combinations of goods and services it can produce given the resources available. The shape of the PPF is typically curved outward, rather than straight choices outside the PPF are unattainable and choices inside the PPF are wasteful.

• Efficiency and Economic Growth :

Efficiency is an economic term describing a level in which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product. This happens when production is reportedly occurring along a production possibility frontier (PPF).

Production efficiency may also be referred to as productive efficiency. Productive efficiency similarly means that an entity is operating at maximum capacity

• Economic gowth is an increase in what an economy can produce if it is using all its scarce resources. An increase in an economy's productive potential can be shown by an outward shift in the economy's production possibility frontier (PPF) .