The economy is producing on its production possibility curve. With th…

Given below is a production possibility schedule showing different quantities of two commodities – Cars and Computers which can be produced in an economy.

	Cars	Computers
A.	150	10
B.	140	20
C.	120	30
D.	90	40

The economy is producing on its production possibility curve. With the same total resources, it moves more resources into the production of computers. What will happen?

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → The economy will move along the same curve, producing more computers and fewer cars.

The total resources do not change. Moving more of them into computers leaves fewer for cars. The economy produces more computers and fewer cars, moving along the same curve.

Option (1) The economy will move along the same curve, producing more computers and fewer cars. — Correct. Only the use of the same resources changes.

Option (2) The curve will move outwards. — Incorrect. The curve moves out only with more resources or better technology.

Option (3) The curve will move inwards. — Incorrect. The curve moves in only with a loss of resources.

Option (4) The economy will move to a point below the curve. — Incorrect. The economy was on the curve and no resource becomes idle, so it stays on the curve.

Note: A shift of the PPC is not explained in the NCERT book (2026-27), but NTA asks questions on it, so such questions are included here. The PPC is drawn for a given amount of resources and a given technology; when these change, the whole curve moves.

NCERT (2026-27): “Production Possibility Frontier If more of the scarce resources are used in the production of corn, less resources are available for the production of cotton and vice versa. Therefore, if we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone. …”

“… Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy.”