Question

Higher PPC curve indicates _________.

• A. more production of both the commodities due to an increase in technology or supply of factor inputs
• B. more production of one at the expense of other
• C. more production of one items at the expense of other with increase in technology or supply of factor input
• D. less than full employment situation

Answer 1

The correct option is A more production of both the commodities due to an increase in technology or supply of factor inputs

Production possibility curve shows the different combinations of the production of two commodities that can be achieved in an economy given the resources and technology which are to be fully utilized. Therefore to achieve any point beyond PPC, there is need for an increase in the present supply of resources and technology which leads to an outward shift in production possibility curve. So any point beyond PPC indicates more production of both the commodities owing to increase in supplied resources and technology.