Practicing Success
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. |
Under employment of resources is represented by which point? |
A F D E |
E |
Any point on the Production Possibility Curve (PPF) (Point A and D) shows efficient utilization of resources whereas any point below PPF (Point E) shows their under-utilization. |