Suppose an economy can produce either 100 units of good X and 200 units of good Y, or 150 units of good X and 100 units of good Y, or 200 units of good X and 0 units of good Y. If the production possibilities frontier (PPF) represents the maximum possible output combinations, which of the following combinations would be unattainable?

• A. 250 units of good X and 100 units of good Y
• B. 200 units of good X and 0 units of good Y
• C. 100 units of good X and 200 units of good Y
• D. 150 units of good X and 100 units of good Y

Answer: (A)

Verified step by step guidance

1. Identify the given points on the Production Possibilities Frontier (PPF): (100, 200), (150, 100), and (200, 0), where the first number represents units of good X and the second number represents units of good Y.
2. Understand that the PPF shows the maximum possible output combinations of goods X and Y that the economy can produce given its resources and technology.
3. Recognize that any point on or inside the PPF is attainable, while any point outside the PPF is unattainable with current resources.
4. To determine if a given combination (like 250 units of X and 100 units of Y) is attainable, check if it lies beyond the frontier formed by the given points. This can be done by comparing the combination to the linear segments connecting the known points or by calculating the opportunity cost between points.
5. Specifically, calculate the slope (opportunity cost) between the known points and see if the proposed combination exceeds the maximum possible output by interpolating or extrapolating between these points. If it does, the combination is unattainable.