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All unattainable combinations will lie
- a)Under the PPC only
- b)On and under the PPC
- c)On the PPC only
- d)Above the PPC only
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
All unattainable combinations will liea)Under the PPC onlyb)On and und...
Points outside the PPF are unattainable production points given current resources and technologies. It is impossible for an economy to produce outside its PPF. The PPF can change, however, with changes in resources or technology.
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All unattainable combinations will liea)Under the PPC onlyb)On and und...
Explanation:
PPC stands for Production Possibility Curve, which is a graphical representation of the maximum combination of two goods that a country can produce with its available resources and technology. Any point on the PPC represents an attainable combination of the two goods, while any point outside the PPC represents an unattainable combination.
The correct answer is option D, which states that all unattainable combinations will lie above the PPC only. This is because of the following reasons:
1. Definition of PPC: As mentioned earlier, a PPC represents the maximum combination of two goods that a country can produce with its available resources and technology. Therefore, any point above the PPC is not feasible with the existing resources and technology.
2. Opportunity Cost: The PPC also shows the opportunity cost of producing one good over the other. As we move from one point to another on the PPC, there is a trade-off between the two goods. Therefore, any point above the PPC will have a higher opportunity cost than the points on the PPC.
3. Economic Growth: Economic growth means an increase in the available resources and technology of a country, which shifts the PPC outward. Therefore, any unattainable combination that was previously above the PPC may become attainable with economic growth. However, this does not mean that any point below the new PPC becomes unattainable.
Conclusion:
In summary, all unattainable combinations will lie above the PPC only as they are not feasible with the existing resources and technology. Any point on the PPC represents an attainable combination of the two goods, while any point outside the PPC represents an unattainable combination. Economic growth can shift the PPC outward, making previously unattainable combinations feasible.
PPC stands for Production Possibility Curve, which is a graphical representation of the maximum combination of two goods that a country can produce with its available resources and technology. Any point on the PPC represents an attainable combination of the two goods, while any point outside the PPC represents an unattainable combination.
The correct answer is option D, which states that all unattainable combinations will lie above the PPC only. This is because of the following reasons:
1. Definition of PPC: As mentioned earlier, a PPC represents the maximum combination of two goods that a country can produce with its available resources and technology. Therefore, any point above the PPC is not feasible with the existing resources and technology.
2. Opportunity Cost: The PPC also shows the opportunity cost of producing one good over the other. As we move from one point to another on the PPC, there is a trade-off between the two goods. Therefore, any point above the PPC will have a higher opportunity cost than the points on the PPC.
3. Economic Growth: Economic growth means an increase in the available resources and technology of a country, which shifts the PPC outward. Therefore, any unattainable combination that was previously above the PPC may become attainable with economic growth. However, this does not mean that any point below the new PPC becomes unattainable.
Conclusion:
In summary, all unattainable combinations will lie above the PPC only as they are not feasible with the existing resources and technology. Any point on the PPC represents an attainable combination of the two goods, while any point outside the PPC represents an unattainable combination. Economic growth can shift the PPC outward, making previously unattainable combinations feasible.
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All unattainable combinations will liea)Under the PPC onlyb)On and und...
Yes above the ppc only as all attainable combination lies on n under ppc
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All unattainable combinations will liea)Under the PPC onlyb)On and under the PPCc)On the PPC onlyd) Above the PPC onlyCorrect answer is option 'D'. Can you explain this answer?
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