ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The economy does not have enough resources to produce any combination of 2 goods above the curve
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Labour is not 100% efficient
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In the real world economy there is wastage of productive resources
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The opportunity cost is too high
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Detailed explanation-1: -Conversely, any point outside the PPF curve is impossible because it represents a mix of commodities that will require more resources to produce than are currently obtainable.
Detailed explanation-2: -The U.S. economy would be operating within the curve, leading to a decrease in standard of living. At the same time, any point outside the production possibilities curve is impossible. More of both goods cannot be produced with the limited resources.
Detailed explanation-3: -An individual or a country cannot produce beyond its production possibilities frontier. The production possibilities frontier shows the most that an individual or country can produce for a given amount of resources and technology.
Detailed explanation-4: -The country cannot produce a combination outside the current production possibility curve because of the scarce resources. However, if the country advances its technology in the future, it will produce more goods, making efficient use of the available resources.