Question

8. If an economy is operating inside the PPC, it is possible to increase the production of Good-1 without any decrease in the production of Good-2. ​

Answer 1

Question 1.) If an economy is operating inside the PPC, it is possible to increase the production of Good-1 without any decrease in the production of Good-2.

Answer 1.) True . It is possible to increase the production of good - 1 without any decrease in the production of good -2 . Because being inside the PPC points to a situation when resources are not fully utilised ( or are not efficiently utilised)

Answer 2

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• ✓Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.
• ✓Therefore, every point on PPC indicates that resources are efficiently and fully utilised for the production of goods and services in the economy.Therefore, when a country operates on the PPC, the potential output is achieved, in terms of actual output.