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Introduction - Micro Economics - DPP 05 - (Kautilya)

The document discusses various ways an economy can increase its production capacity, including education, foreign capital, and technical training. It addresses the economic values associated with reducing unemployment and improving resource allocation. Additionally, it explains the implications of the production possibilities frontier (PPC) and the marginal rate of transformation.

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39 views3 pages

Introduction - Micro Economics - DPP 05 - (Kautilya)

The document discusses various ways an economy can increase its production capacity, including education, foreign capital, and technical training. It addresses the economic values associated with reducing unemployment and improving resource allocation. Additionally, it explains the implications of the production possibilities frontier (PPC) and the marginal rate of transformation.

Uploaded by

jackthefighter2
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Kautilya Batch
Introduction-Micro Economics DPP-05

1. How in any one way can an economy increase its 6. Name the economic value achieved through the
production capacity? spread of education in the context of production
potential.
2. A country's resources are fully and efficiently
employed. The problem of scarcity exists. What 7. Name the economic value achievable when attempts
advice will be given to raise the efficiency level of are made to increase resources in the country.
the human resource to fight scarcity?
8. State any two central problems under 'problem of
3. Unemployment is reduced due to the measures taken allocation of resources'.
by the government. State its economic value in the
context of production possibilities frontier. 9. What does concavity of PPC indicate?

4. The government has started promoting foreign 10. What is the effect on marginal rate of transformation
capital. What is its economic value in the context of when we move downwards along a production
Production Possibilities Frontier? possibility curve?

5. Large number of technical training institutions have


been started by the government. State its economic
value in the context of production possibilities
frontier.
2

Answer Key
1. (With Discussion) 6. (With Discussion)
2. (With Discussion) 7. (With Discussion)
3. (With Discussion) 8. (With Discussion)
4. (With Discussion) 9. (With Discussion)
5. (With Discussion) 10. (With Discussion)
3

Hints & Solutions


1. (H & S) 6. (H & S)
Production capacity can be increased through It will result in increase in efficiency leading
upgradation in production technology. to economic growth.

2. (H & S) 7. (H & S)
Spread of education and training. Economic growth.

3. (H & S) 8. (H & S)
The economic value of reduction in (i) What to produce and in what quantity;
unemployment is that it will help the (ii) How to produce.
economy in realising its production potential.
9. (H & S)
4. (H & S) Concavity of PPC means that for every
It will increase inflow of foreign capital. Its additional unit of one good produced, more
economic value is the rise in production and more units of another good is to be
potential due to increase in resources. sacrificed.

5. (H & S) 10. (H & S)


The economic value of technical training is Marginal Rate of Transformation increase
that it raises the production potential of the while we move downwards along a
country by raising the efficiency of the production possibility curve (PPC).
labour.

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