The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars.Figure 2.1

-Refer to Figure 2.1. If the country's PPC curve is curve II, then:

Question

The figure given below represents the production possibilities curves [PPC] of a country producing wine and cars.Figure 2.1
 
-Refer to Figure 2.1. If the country's PPC curve is curve II, then:

Quizplus · Accepted Answer

If the country's PPC curve is curve II, then point D represents an under-utilization of resources as it is inside the PPC curve, which means the country is not using all of its resources efficiently. Point A is attainable but not efficient, and point E represents a combination of production that is not currently possible given the resources available. The information in the question does not provide any indication that wine is cheaper than cars.

The Figure Given Below Represents the Production Possibilities Curves [PPC]