A country cannot produce a mix of products with a higher value than where
A) the isovalue line is above the production possibility frontier.
B) the isovalue line is below the production possibility frontier.
C) the isovalue line is tangent with the indifference curve.
D) the isovalue line is tangent to the production possibility frontier.
E) the isovalue line intersects the production possibility frontier.

Question

Quizplus · Accepted Answer

The point where the isovalue line is tangent to the production possibility frontier represents the optimal production point, where a country is producing a mix of products that maximizes the value of its production. It is not possible for a country to produce a mix of products with a higher value than this point, as this would require producing a combination of goods that lies outside the production possibility frontier, which is not possible.

A Country Cannot Produce a Mix of Products with a Higher