Question
What is Marginal Rate of Transformation? Explain with the help of numerical example.
✓
Answer
Marginal Rate of Transformation of a particular good along PPC is the amount of a particular good which is sacrificed to increase the production of the other good by 1 unit. It also called MOC (Marginal Opportunity Cost).
Here,$\text{MRT}=\frac{\Delta\text{Guns}}{\Delta\text{Butter}}=\frac{\Delta\text{Y}}{\Delta\text{X}}$
| Production Possibilities (Thousands kgs) | Amount of (X)(Butter in)kg. | Amount of (Y)(Guns) Thousand | $\text{MRT}=\frac{\Delta\text{Y}}{\Delta\text{X}}$ |
| A | 0 | 21 | -- |
| B | 1 | 20 | 1Y : 1Y |
| C | 2 | 18 | 2Y : 1X |
| D | 3 | 15 | 3Y : 1X |
| E | 4 | 11 | 4Y : 1X |
| F | 5 | 6 | 5Y : 1X |
| G | 6 | 0 | 6Y : 1X |
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