Which of the following statements is NOT true regarding production technologies in the context of the Production Possibilities Frontier (PPF)?

• A. Production technologies have no impact on the shape or position of the PPF.
• B. A point inside the PPF indicates that resources are not being used efficiently.
• C. All points on the PPF represent combinations of goods produced using available resources and technology efficiently.
• D. Technological improvement can shift the PPF outward, allowing more of both goods to be produced.

Answer: (A)

Verified step by step guidance

1. Understand the concept of the Production Possibilities Frontier (PPF): it represents the maximum possible output combinations of two goods that an economy can produce given available resources and technology.
2. Recall that the shape and position of the PPF depend on the production technology and resource availability. Changes in technology can affect how efficiently resources are used.
3. Analyze each statement in the problem: identify which statements correctly describe the PPF and which one contradicts economic theory.
4. Recognize that a point inside the PPF means resources are underutilized or inefficiently used, which is a true statement.
5. Understand that technological improvements allow more output from the same resources, shifting the PPF outward, so the statement claiming technology has no impact on the PPF is false.