Identify, where the point will lie in the production possibility frontier when the resources are either underemployed or are utilized in a wasteful manner.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A point below the production possibility frontier
The Production Possibility Frontier (PPF) represents the maximum possible combinations of two goods that an economy can produce using all its resources efficiently.
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If resources are fully and efficiently employed, production lies on the PPF curve.
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If resources are underemployed or used inefficiently, actual production is less than potential, so the point lies below the PPF.
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A point above the PPF is unattainable with current resources and technology.