Question

Are the following statements true or false. Give reasons:

a) If the economy operates inside PPC, it shows full utilisation of resources.
b)Growth of resources shifts the PPC to right.
c) Economy can never operate outside the PPC with given resources and technology.

Answer 1

a. False
Reason: inside PPC means not fully and efficiently utilisation of resources.
b. True
c. False
Reason: economy can operate outside PPC with full and efficient utilisation of resources.