Production Possibility Curve

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SHIFTS & ROTATIONS IN PRODUCTION POSSIBILITY CURVE

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    Learning Contents:                                                                Shifts   in   PPC  Rotations in PPC Change in Production Possibility Curve (Shifting/Rotation) The change in the Production Possibility curve can be of two types:  Shift in PPC: PPC will shift when there is a change in productive capacity (resources or technology) with respect to both the goods. Rotation of PPC: PPC will rotate when there is a change in productive capacity (resources or technology) with respect to only one good. Shifts in PPC:   The shift in PPC can either be rightward or backward. These shifts bring about a change in the production of both go...
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Income Elasticity: Luxury Goods, Necessity Goods, and Inferior Goods.

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  Learning Contents:                                                               ·         Understanding Income Elasticity with respect of luxury goods, necessity goods and inferior goods. The demand for a commodity not only depends on the price of a commodity but also the income level of the consumer. It is a general understanding that a consumer usually prefers to spend more when his income rises and less when his income falls. Sometimes, we might also experience a fall in the demand of certain goods and services even when income rises. Therefore, income elasticity varies with respect to different types of goods and services. The income elasticity me...
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CONCEPT OF TOTAL UTILITY AND MARGINAL UTILITY

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    Learning Contents:                                                              ·          Concept of Total Utility ·          Concept of Marginal Utility & its types ·          Relationship between Total and Marginal Utility Total Utility (TU) If the utility is cardinal and measurable, the total utility is defined as the sum total of utility (satisfaction) derived from the consumption of all the units of a commodity. In mathematical terms, Total utility is the direct function of the number of units of a commodity. In simple words, more of the units o...
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