Which of the following is not correct statement ?

Production possibility curve does not explain the opportunity cost of production of x and y

The correct answer is option (1) : Production possibility curve does not explain the opportunity cost of production of x and y

The statement "Production possibility curve does not explain the opportunity cost of production of x and y" is not correct because the production possibility curve (PPC) is specifically designed to illustrate and explain the concept of opportunity cost in production.

Other Options:

• In a market economy all goods come with a price: This statement is correct. In a market economy, goods and services are typically assigned a price based on supply and demand dynamics.

• Microeconomics does not analyse the problem of unemployment: This statement is correct. Unemployment is primarily a macroeconomic issue.

• Positive economics studies how the different mechanisms function: This statement is correct. Positive economics deals with objective analysis and describes how economic systems and mechanisms function without making value judgments.