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If a point falls inside the production possibility curve, what does it indicate?
- a)Resources are over utilized
- b)Resources are under utilized
- c)There is employment in the economy
- d)Both (b) and (c)
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
If a point falls inside the production possibility curve, what does it...
A point lying inside the production possibilities curve indicates underutilization, unemployment, or inefficient use of resources: more goods and services could be produced by using the limited resources more fully and efficiently.
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If a point falls inside the production possibility curve, what does it...
Explanation:
What does it indicate if a point falls inside the PPC?
A production possibility curve (PPC) is a graphical representation of the combination of two goods that can be produced in an economy given its resources and technology. Any point inside the PPC represents an inefficient use of resources because the economy can produce more of both goods without sacrificing any of the other.
What does it indicate if a point falls inside the PPC?
- Resources are underutilized: A point inside the PPC indicates that an economy is not using its resources to their full potential. It means that the economy is not producing the maximum possible output of goods from the given resources.
- There is unemployment in the economy: If the economy is not using its resources to their full potential, it means that some resources are lying idle, and there is unemployment in the economy. The resources could be labor or capital, and their underutilization means that the economy is not creating the maximum number of jobs possible.
In conclusion, a point inside the production possibility curve indicates that an economy is not using its resources to their full potential, and there is unemployment in the economy.
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Community Answer
If a point falls inside the production possibility curve, what does it...
It shows that resources are underutilized. Because when the resources are full utilized then the point comes on production possibly curve. aAnd when resources are not fully utilized it will not reach upto the production possibly curve,it remains under the ppc
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If a point falls inside the production possibility curve, what does it indicate?a)Resources are over utilizedb)Resources are under utilizedc)There is employment in the economyd)Both (b) and (c)Correct answer is option 'B'. Can you explain this answer?
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