Which of the following is NOT true regarding points located on the Production Possibilities Frontier (PPF)?

• A. Points on the PPF indicate that resources are fully and efficiently utilized.
• B. Moving along the PPF involves a trade-off between the production of two goods.
• C. All points on the PPF represent combinations of goods produced with productive efficiency.
• D. Points on the PPF represent unattainable combinations of goods given current resources and technology.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand what the Production Possibilities Frontier (PPF) represents. The PPF shows the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
2. Step 2: Recognize that points on the PPF indicate full and efficient use of resources. This means the economy is producing at its productive efficiency, with no resources wasted.
3. Step 3: Know that moving along the PPF involves a trade-off, meaning producing more of one good requires producing less of the other due to limited resources.
4. Step 4: Identify that points inside the PPF represent inefficient production (underutilization of resources), while points outside the PPF are unattainable with current resources and technology.
5. Step 5: Conclude that the statement 'Points on the PPF represent unattainable combinations of goods given current resources and technology' is NOT true, because points on the PPF are attainable and represent efficient production.