Question

In the given figure, the movement on the production possibility curve from point A to point B shows ______.

(Choose the correct alternative) 

Options

• Growth of all the resources in the economy

• Underutilisation of resources

• Production of more units of Good X and less units of Good Y

• Production of more units of Good Y and less units of Good X

Answer 1

In the given figure, the movement on the production possibility curve from point A to point B shows production of more units of Good X and less units of Good Y.

Explanation:

A movement along the PPF from A to B means resources are shifted from Good Y to Good X, so more of Good X and less of Good Y is produced.