The combination of goods which are beyond the boundary line of the PPC is often regarded as which of the following?
Answer & explanation
Correct answer: option 2
The correct answer is option 2: Unattainable combination
- The Production Possibility Curve (PPC) represents the maximum possible output combinations of two goods that an economy can produce with available resources and technology.
- Any point beyond the PPC boundary represents a combination of goods that the economy cannot currently produce because it lacks sufficient resources or technology.
- Therefore, such a combination is called an Unattainable Combination because it lies outside the production possibilities of the economy.
- These can only be achieved if there is a shift in PPC due to increase in resources of the economy or technology.