Question

Suppose the following represents the Canadian production possibilities for two of its most important exports: maple syrup (in millions) and tree logs (in millions). Please choose the best answer for each question. Point H is not possible and is unobtainable, even if international trade occurs. is possible, but not efficient. is possible and efficient. is not possible and is unobtainable, unless international trade occurs. Point M is not possible and is unobtainable, unless international trade occurs. is not possible and is unobtainable, even if international trade occurs. is possible, but not efficient. is possible and efficient. Point Y is possible and efficient. is not possible and is unobtainable, unless international trade occurs. is possible, but not efficient.

Answer 1

The production possibility curve is the curve that shows the possible combination of two goods that can be producing using given resources and technology.

Suppose Country C produces two goods- maple and log. The following figure represents the PPC (production possibility curve) of Country C.

The above figure show s all possible combinations of maple and log given the resources and technology.

The above figure show \(\mathrm{s}\) all] combination of combinations and log given the resources and technology.

Any point that lies on PPC is efficient and attainable.

Any point that lies to the left of PPC is attainable but efficient because this point could be produced but could increase the production of at least one good without decreasing the production of other goods.

Any point that lies to the right of \(\mathrm{PPC}\) is unattainable or unobtainable unless international trade occurs because this point could not produce with the existing resources of the economy.

Therefore, point \(\mathrm{H}\) is possible but not efficient. Point \(\mathbf{M}\) is possible and efficient. Point \(Y\) is not possible and is unobtainable unless international trade occurs.