Question:
A movement along the Production Possibilities Curve from one point to another involves:
(1) no change in opportunity cost or productive efficiency.
(2) a change in opportunity cost but no change in productive efficiency.
(3) a change in productive efficiency but no change in opportunity cost.
(4) no change in opportunity cost or allocative efficiency.
(5) a change in productive efficiency but no change in allocative efficiency.
Correct Answer:
(2)
Answer Explanation:
Any point on the PPC represents productive efficiency. Moving along the curve changes the combination of goods produced, which changes the opportunity cost (due to the law of increasing opportunity cost), but the economy remains productively efficient.
Topic: PPC Year: 2024
Leave a Reply