Country 1 produces two goods,A and B.Country 2 produces the same two goods.Currently,country 1 produces 100A and 200B and country 2 produces 300A and 700B.Which of the following statements is true?

Question

Quizplus · Accepted Answer

None of the statements are necessarily true. The production possibilities frontier (PPF) is determined by a country's resources and technology, and can vary between countries even if they produce the same goods. It's possible for country 1 to be on its PPF while country 2 is not, and it's also possible for country 1 to be productive inefficient while country 2 is on its PPF. The position of the PPF relative to the origin can also vary based on the countries' resource endowments. Therefore, none of the statements are necessarily true.

Country 1 Produces Two Goods,A and B