Question

Even when resources and technology are constant, an economy may not operate on the PPC.

• A. True
• B. False

Answer 1

The correct option is A True

Production possibility curve shows all the different attainable combinations of the production of two commodities that can be produced in an economy with the given resources and technology which are to be fully utilized.

However, if an economy underutilises resources, the economy will operate on a point inside the PPC.