Identify the point or points for which the following is true: The economy cannot reach this point without an increase in resources or improvement in technology
Identify the point or points for which the following is true: The economy cannot reach this point without an increase in resources or improvement in technology
In Economics, the PPF is a curve that shows the varieties/bundles in the sums that can be delivered of two goods if both rely on similarly limited resources for their manufacture. It additionally plays a very crucial role in economics. It tends to be utilized to exhibit the point that any country's economy arrives at its most noteworthy degree of productivity when it produces just what it is best able to deliver and trade with different countries for the remainder of what it needs. It is a locus of the production bundle at the optimal allocation of resources. There are three crucial parts in the PPF which are given below
- Below PPF: Under-utilization of resources can be better of without changing technology and resources. (i.e point F in the graph)
- On the PPF: This is the point where the economy is at the optimal point, it means one cannot more than that point using the same resources and same level of technology. (i.e point A, B, C and D in the graph)
- Above the PPF: It is the point where one cannot achieve that production level without enhancement in the resources or innovation of the production technology. (i.e point E in the graph)
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