The economy can operate
A) beyond its institutional PPF but not beyond its physical PPF.
B) on both its institutional PPF and its physical PPF,but not at the same time.
C) under its physical PPF but not under its institutional PPF.
D) a and b
E) a,b,and c

Question

Quizplus · Accepted Answer

The economy can operate on both its institutional PPF and its physical PPF, but not at the same time. The institutional PPF is the boundary of what the economy can produce given its current institutions and technology. The physical PPF is the boundary of what the economy can produce given its current resources and technology. The economy can operate beyond its institutional PPF but not beyond its physical PPF.

The Economy Can Operate