Which of the following is not correct? Typical production possibilities curve
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a indicates that to produce more of one product society must forgo larger and larger amounts of the other product.
b specifies how much of each product society should produce.
c indicates how much of two products a society can produce.
d reveals how much each additional unit of one product will cost in terms of the other pro
The Correct Answer and Explanation is :
The correct answer is b: specifies how much of each product society should produce.
Explanation:
A production possibilities curve (PPC), also known as a production possibilities frontier (PPF), is a graphical representation that shows the maximum possible output combinations of two goods or services that an economy can produce, given its available resources and technology.
- Option (a): “indicates that to produce more of one product society must forgo larger and larger amounts of the other product” – This statement is correct. The PPC typically demonstrates the trade-offs between two goods. As an economy increases the production of one good, it has to decrease the production of the other, which is called the law of increasing opportunity cost. This law suggests that the opportunity cost (the value of what is given up) increases as more of one product is produced.
- Option (b): “specifies how much of each product society should produce” – This statement is incorrect. The PPC does not specify how much of each product society should produce. It only shows the maximum potential output combinations of the two goods, assuming efficient use of resources. It does not suggest what is optimal or desired in terms of specific output levels. The actual decision of how much to produce involves factors like consumer preferences, prices, and resource allocation, which go beyond the scope of the PPC itself.
- Option (c): “indicates how much of two products a society can produce” – This statement is correct. The PPC illustrates the maximum amounts of two goods that can be produced, given a set amount of resources and technology. It shows the trade-offs and opportunity costs involved in choosing different production combinations.
- Option (d): “reveals how much each additional unit of one product will cost in terms of the other” – This statement is also correct. The slope of the PPC reveals the opportunity cost of producing one more unit of a good in terms of the other good. If the slope of the curve is steeper, the opportunity cost of producing one more unit of the good on the x-axis is higher in terms of the good on the y-axis.
In summary, option b is the only statement that is incorrect, as the PPC does not prescribe specific production levels; it simply shows the maximum feasible production combinations.