There was an argument between Kirti and Sehwag that the non attainable combinations can never be converted into attainable combinations. Kirti said it can be converted on a PPC whereas, Sehwag said it cannot be converted. According to you who is right?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Kirti is correct
Non-attainable combinations on the Production Possibility Curve (PPC) represent points beyond the economy's current production capacity given its resources and technology. However, the non-attainable combinations on a PPC can be converted into attainable combinations in the following two ways:
- When the resources are increased.
- When there is an improvement in the technology.
Thus, we can conclude that if we shift the PPC towards the points where unattainable combinations lie, we can achieve the unattainable combination by either increasing the resources of the economy or improving the technology.