A country produces only rice and steel. Match the situations (List-I)…

A country produces only rice and steel. Match the situations (List-I) with the economic ideas they show (List-II):

List-I	List-II
(A) Deciding how much land, labour and machinery go into rice and how much into steel	(I) Production possibility set
(B) Deciding who gets how much of the rice and steel produced	(II) Opportunity cost
(C) All the combinations of rice and steel that can be produced with the given resources and technology	(III) Allocation of resources
(D) The amount of steel given up to produce one more unit of rice	(IV) Distribution of the final goods

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Each situation shows one idea about how a country uses its limited resources to produce rice and steel.

List-I	List-II	Reason
(A) Deciding how much land, labour and machinery go into rice and how much into steel	(III) Allocation of resources	Allocation means how much of each resource goes into each good.
(B) Deciding who gets how much of the rice and steel produced	(IV) Distribution of the final goods	Sharing the output among the people is distribution.
(C) All the combinations of rice and steel that can be produced with the given resources and technology	(I) Production possibility set	The set is the collection of all possible combinations.
(D) The amount of steel given up to produce one more unit of rice	(II) Opportunity cost	It is the other good forgone for one more unit.

NCERT (2026-27): “1.1 A Simple Economy Any allocation of resources of the society would result in the production of a particular combination of different goods and services. The goods and services thus produced will have to be distributed among the individuals of the society. The allocation of the limited resources and the distribution of the final mix of goods and services are two of the basic economic problems faced by the society.”

“By an allocation of the resources, we mean how much of which resource is devoted to the production of each of the goods and services.”

“Production Possibility Frontier … Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy.”

“If more of the scarce resources are used in the production of corn, less resources are available for the production of cotton and vice versa. Therefore, if we want to have more of one of the goods, we will have less of the other good. Thus, there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone. This is known as the opportunity cost of an additional unit of the goods.”