Question

Assume that a country produces two goods, Autos and Rice. The combination 10m Autos and 40m tons of Rice is on the countrys production possibilities frontier. Which of the following production combinations is also on the production possibilities frontier? (a) 4m Autos and 36m tons of Rice (b) 10m Autos and 50m tons of Rice (c) 16m Autos and 18m tons of Rice (d) 12m Autos and 50m tons of Rice X

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Answer #1

Ans: 16m Autos and 18m tons of Rice

Explanation:

In a PPF, when the production of one product increases, the production of another product decreases.

In option (a), production of both the goods decreases. So, it is incorrect.

In option (b), production of rice increases, keeping production of as unchanged. So, it is incorrect.

In option (c), production of auto increases and production of rice decreases. So, it is correct.

In option (d), production of both the goods increases. So, it is incorrect.

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