Which one of the following statements is true with regard to an economy which is on its production p...........

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Which one of the following statements is true with regard to an economy which is on its production possibility frontier?

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CAPF 2019 Paper-1

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The economy has to sacrifice some production of one commodity in order to increase the production of another commodity

There is no limit or constraint for the economy in the production of goods and services

The economy can produce more of one commodity up to a point without reducing the production of any other commodity

Its production possibility frontier is an upward sloping curve

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Explanation:

Production possibility frontier graph indicates all the possibilities of production of two different commodities when resources are fixed. Production of one commodity can be increased by decreasing the production of another commodity. It also measures the production efficiency of the commodities. The curve is a downward-sloping curve.