The table shows the combinations of sugar and rice that an economy can produce when its resources are fully utilised:
| Sugar (units) | 0 | 10 | 20 | 30 |
| Rice (units) | 60 | 50 | 30 | 0 |
Consider two combinations: P = 10 units of sugar and 40 units of rice; Q = 20 units of sugar and 35 units of rice. Which of the following is correct?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → P is produced when some resources are underemployed or wasted, and Q cannot be produced with the present resources.
The table gives the most rice the economy can produce for each amount of sugar. Compare each combination with it.
P: at 10 units of sugar, the most rice is 50 units. P has only 40 units. So P lies strictly below the frontier: some resources are underemployed or used wastefully.
Q: at 20 units of sugar, the most rice is 30 units. Q asks for 35 units. So Q lies beyond the frontier and cannot be produced with the present resources and technology.
NCERT (2026-27): “Production Possibility Frontier … If all the resources are used in the production of corn, the maximum amount of corn that can be produced is 4 units and if all resources are used in the production of cotton, at the most, 10 units of cotton can be produced. … 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.” “The production possibility frontier gives the combinations of corn and cotton that can be produced when the resources of the economy are fully utilised. Note that a point lying strictly below the production possibility frontier represents a combination of corn and cotton that will be produced when all or some of the resources are either underemployed or are utilised in a wasteful fashion.” |