ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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if a point falls in the interior of a ppc, there is a(n)
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decreasing opportunity cost
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economic growth
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boom of resources
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recession
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Explanation:
Detailed explanation-1: -If a point falls inside the production possibility curve it means either the resources are under utilised or there is unemployment in the economy.
Detailed explanation-2: -A PPF will shift inwards when an economy has suffered a loss or exhaustion of some of its scarce resources. This reduces an economy’s productive potential.
Detailed explanation-3: -Only points on or within a PPF are actually possible to achieve in the short run. In the long run, if technology improves or if the supply of factors of production increases, the economy’s capacity to produce both goods increases; if this potential is realized, economic growth occurs.
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