Given a production possibilities frontier (PPF) diagram, which of the following statements is NOT correct regarding point x, which lies on the PPF curve?

• A. Point x represents productive efficiency.
• B. Point x is unattainable with current resources and technology.
• C. Point x shows a combination of two goods that can be produced given the economy's resources.
• D. At point x, all available resources are fully utilized.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what a Production Possibilities Frontier (PPF) represents. The PPF curve shows all the possible combinations of two goods that an economy can produce using all available resources efficiently and technology at a given time.
2. Step 2: Recognize that any point lying on the PPF curve, such as point x, represents productive efficiency. This means the economy is using all its resources fully and efficiently without any waste.
3. Step 3: Identify that points on the PPF are attainable with current resources and technology because they represent feasible production combinations. Points inside the curve are inefficient, and points outside are unattainable given current constraints.
4. Step 4: Analyze the statements given: since point x lies on the PPF, it must be attainable, fully utilizing resources, and productively efficient. Therefore, the statement claiming point x is unattainable is incorrect.
5. Step 5: Summarize that the incorrect statement is the one that says point x is unattainable with current resources and technology, because by definition, points on the PPF are attainable and efficient.