Question

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Refer to the production possibilities frontier in below. Which of the following statements is true about point ? Good Y 0 2 4 6 8 10 Good X Select one: a. It is attainable only if we consume more of good X b. It is attainable only if we consume more of good Y. It is attainable only if we consume less of good Y. d. It is attainable only if we consume less of good X e. It is unattainable. o

Answer 1

1 - ( e ) it is unattainable .

Because when we are under the PPF curve we are not using the resources fully whereas when we are on the PPF curve we are efficient as there is no other way to get more of good X or good Y but at the point C its laying outside the PPF curve which indicates that its unattainable because of constraints in resources and time.  

2 - ( e ) Cannot be calculated from the table .

3 - ( d ) An increase in the stock of capital .

Because an increase in the investment for the capital goods and in the critical infrastructure leads to an increase in the stock of capital . It obvious that a new capital is more effective and productive than the old capitals and provides higher productivity from the available factors of resources which will lead to the outwards shift of the PPF curve .