-Based on the production function in the above figure, which of the following is an attainable combination of labour and real GDP?
i. 300 billion hours of labour and real GDP of $20 trillion
ii. 300 billion hours of labour and real GDP of $8 trillion
iii. 100 billion hours of labour and real GDP of $12 trillion

Question

Quizplus · Accepted Answer

Given the production function, an attainable combination of labour and real GDP is one that falls on or below the production possibility frontier (PPF). Option ii is attainable because it represents a combination of labour and output that the economy can produce given its resources and technology. Options i and iii suggest levels of GDP that are either too high for the given hours of labour or too high for the production capabilities of the economy, making them unattainable based on the information provided.

-Based on the Production Function in the Above Figure, Which