Question

Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.

Short answer

The points outside the production possibility curves cannot be attained using the given reosurces, while the points inside show productive inefficiency. The points on the curve show the most efificent and attainable combinations.

Step-by-step solution

; Diagram

the following diagram shows different combination on PPF

; Explanation

• All the points on PPF curve shows fuller utilization of resources.

• Point E inside PPF shows inefficient use of resources because it leads to wastage of resources. It is inefficient because more production could be achieved at no additional cost.

; Unattainable or non feasible combination

• Point F outside the PPF shows combination which cannot be produced with given resources and technology.