Which of the following points on a Production Possibilities Frontier (PPF) graph represents an economic situation that is not sustainable?

• A. A point at the origin
• B. A point on the PPF curve
• C. A point inside the PPF curve
• D. A point outside the PPF curve

Answer: (D)

Verified step by step guidance

1. Understand what a Production Possibilities Frontier (PPF) represents: it shows the maximum possible combinations of two goods that an economy can produce using all available resources efficiently.
2. Recognize that points on the PPF curve represent efficient and sustainable production levels, where resources are fully utilized.
3. Identify that points inside the PPF curve indicate underutilization of resources, meaning the economy is producing less than it could, but this situation is still sustainable.
4. Note that a point at the origin means producing nothing, which is sustainable but not efficient or desirable.
5. Understand that a point outside the PPF curve represents a production level that is currently unattainable with the available resources and technology, making it unsustainable.