ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A production possibilities frontier, or PPF, defines the set of possible combinations of goods and services a society can produce given the resources available. Choices outside the PPF are unattainable (at least in any sustainable way), and choices inside the PPF are inefficient.

Detailed explanation-2: -The Production Possibilities Frontier (PPF) is a graph that shows all the different combinations of output of two goods that can be produced using available resources and technology. The PPF captures the concepts of scarcity, choice, and tradeoffs.

Detailed explanation-3: -The consumer’s optimal combination of goods is at the point where the budget line is tangent to an indifference curve or where the marginal rate of substitution (MRS) is equal to the opportunity cost or relative price of the two goods, as indicated by the slope of the budget constraint.

Detailed explanation-4: -Answer and Explanation: The correct answer is d) Is currently impossible to produce. Explanation: Any goods that lie outside the production possibilities frontier indicate that its production is impossible.

Detailed explanation-5: -A production possibilities curve shows the combinations of two goods an economy is capable of producing.