Question

Giving reason, comment on the shape of production possibilities curve based on the following schedule:

Good-X (Units)	$0$	$1$	$2$	$3$	$4$
Good-Y (Units)	$16$	$12$	$8$	$4$	$0$

Answer 1

Good-X (Units)	Good-Y (Units)	Marginal Rate of Transformation
$0$	$16$	-
$1$	$12$	$4Y:1X$
$2$	$8$	$4Y:1X$
$3$	$4$	$4Y:1X$
$4$	$0$	$4Y:1X$

Since marginal rate of transformation is constant, the production possibility curve is to be a straight line sloping downward.