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Home Questions AU3N69GNE7
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Which of the following definition is correct answer of the production possibility set of the economy ?

Options:

The collection of all possible combinations of the goods and services that can not be produced from a fixed amount.

The collection of all possible combination of goods and services that can be produced from a given amount of resources and a given stock of technological knowledge

The combinations of different type of goods and its utilisation are related with each other

The combinations of all goods and its resources creates the production possibility curve

Correct Answer:

The collection of all possible combination of goods and services that can be produced from a given amount of resources and a given stock of technological knowledge

Explanation:

The correct answer is option (2) : The collection of all possible combination of goods and services that can be produced from a given amount of resources and a given stock of technological knowledge

Here's why:
The production possibility set (PPS) represents the feasible output combinations for an economy. It considers limitations like a fixed amount of resources (land, labor, capital) and a specific level of technological knowledge. It defines the maximum achievable production levels for different goods and services given these constraints.

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