Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Assume there are only two goods produced in the economy (having fixed amount of resources and technology), Good A and Good B. The quantities of Good A and Good B which can be produced using given resources are plotted on a graph with good A on x-axis and Good B on y-axis. Different combinations of A and B when plotted and joined gave a downward sloping concave curve. One point, Point F lies above the curve. Point E lies below the curve.

What does the Point F represent?

Options:

Attainable combination of goods with given resources

Unattainable combination of goods with given resources

Efficient utilization of resources

None of above

Correct Answer:

Unattainable combination of goods with given resources

Explanation:

All points outside Production Possibility Curve (PPF) are unattainable with the given amount of resources and technology. Only when the resources of an economy increase or state of technology improves that PPF will shift outwards and those points become attainable.