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:
(-1) or (-2)
Answer Explanation:
Any point on the PPC represents a state of full productive efficiency. Moving along the curve maintains this efficiency but changes the combination of goods produced. Because the curve is typically concave, shifting resources from one good to another changes the marginal opportunity cost.
Topic: PPC Year: 2024
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