2021 · Q31
Which one of the following statements about production possibility frontier is not correct?
indian-polity-economyeconomy-fundamentals
- AThe production possibility frontier slopes downwards to the right as the resources are limited.
- BThe different combinations of various goods and services given the available resources and technology are denoted by the production possibility frontier.
- CAny point on or inside the production possibility frontier is attainable under the existing technology and resources.
- DOn the production possibility frontier, the output of one commodity can be increased without changing the output of another commodity.
Explanation
The production possibility frontier represents maximum attainable combinations of two goods with given resources and technology, so moving along it to produce more of one commodity necessarily means producing less of the other (opportunity cost). Statement D denies this trade-off and is therefore not correct. Statements A, B and C correctly describe the frontier's downward slope, its combinations, and attainability. Hence D is the not-correct statement.