The table shows some combinations of corn and cotton that an economy can produce when its resources are fully utilised:
| Possibility | A | B | C | D | E |
|---|---|---|---|---|---|
| Corn (units) | 0 | 1 | 2 | 3 | 4 |
| Cotton (units) | 10 | 9 | 7 | 4 | 0 |
How many of the following combinations can this economy produce with its present resources and technology?
(A) 1 unit of corn and 8 units of cotton
(B) 2 units of corn and 7 units of cotton
(C) 3 units of corn and 5 units of cotton
(D) 4 units of corn and 1 unit of cotton
(E) 0 units of corn and 10 units of cotton
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
A combination can be produced if it lies on or below the frontier. With 1, 2, 3 and 4 units of corn, the most cotton the economy can produce is 9, 7, 4 and 0 units.
(A) 1 unit of corn and 8 units of cotton — Possible. 8 is less than the 9 units possible with 1 unit of corn.
(B) 2 units of corn and 7 units of cotton — Possible. This is possibility C, on the frontier.
(C) 3 units of corn and 5 units of cotton — Not possible. With 3 units of corn the most is 4 units of cotton.
(D) 4 units of corn and 1 unit of cotton — Not possible. Producing 4 units of corn uses all the resources, leaving none for cotton.
(E) 0 units of corn and 10 units of cotton — Possible. This is possibility A, on the frontier.
(A), (B) and (E) can be produced: three in all.
NCERT (2026-27): “Production Possibility Frontier If all the resources are used in the production of corn, the maximum amount of corn that can be produced is 4 units and if all resources are used in the production of cotton, at the most, 10 units of cotton can be produced. The economy can also produce 1 unit of corn and 9 units of cotton or 2 units of corn and 7 units of cotton or 3 units of corn and 4 units of cotton. There can be many other possibilities. The figure illustrates the production possibilities of the economy. Any point on or below the curve represents a combination of corn and cotton that can be produced with the economy’s resources. The curve gives the maximum amount of corn that can be produced in the economy for any given amount of cotton and vice-versa. This curve is called the production possibility frontier.” |