Economising of resources means use of resources in best possible manner.


Y
Concave PPC
Y
Straight line

because
PPC

Good
Good

MOC
because

increasing
MOC Constant

Good X
Good X

Production Possibility Frontier
Features

Good Y

Convex PPC because MOC decreasing
Good X

          Slopes downward from left to right because if production of one good is to increase then production of other good has to be sacrificed.
          Concave to the origin because of increasing marginal opportunity cost or (MRT)
Rightward shift of PPC indicates increase in resources and improvement in technology.
Leftword shift of PPC indicates decrease in resources and degradation in technology.
Marginal Rate of Transformation (MRT) is the ratio of number of units of a good sacrificed to increase one more unit of the other good.
MRT can also called Marginal Opportunity Cost. It is defined as the additional cost in terms of number of units of a good sacrificed to produce an additional unit of the other good.

Condition of Equilibrium:
Px
Px Price of 'x'
(i)   MRSxy


Py


Py Price of 'y'
or budget line must be tangent to indifference curve
          MRS must be decreasing or,
Indifference curve must be convex to the origin.
Demand : It is that quantity which a consumer is able and is willing to buyat given price and in a given period of time.


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