Question
From the following PP Schedule, calculate MRT of good X:
Production possibilities : | A | B | C | D | E |
Production of good X (units) : | 0 | 1 | 2 | 3 | 4 |
Production of good Y (units) : | 14 | 13 | 11 | 8 | 3 |
Solution
Production of good | Production of good | MRT = ∆Y/∆X |
X (units) | Y (units) | |
0 | 14 | — |
1 | 13 | 1 : 1 |
2 | 11 | 2 : 1 |
3 | 8 | 3 : 1 |
4 | 3 | 4 : 1 |
(Mind, MRT of good X means amount of good Y to be sacrificed for producing an additional unit of good X)
