Fill in the blanks:
The collection of all combinations of goods that can be produced from given resources and technology is the production possibility ________, while the curve giving the maximum amount of one good for any given amount of the other is the production possibility ________.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → set; frontier
The production possibility set is the whole collection of combinations that can be produced. The production possibility frontier is the curve that marks the most of one good for each amount of the other.
So every point on the frontier belongs to the set, but the set also has the points below the frontier.
NCERT (2026-27): “Production Possibility Frontier … 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.” “… 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.” |