Points That Lie Outside (Or Beyond)the PPF Are

question 148

Multiple Choice

Points that lie outside (or beyond) the PPF are

• A) attainable.
• B) unattainable.
• C) efficient.
• D) inefficient.

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Definitions:

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors using the same amount of resources.

Comparative Advantage

A principle that states that a party should specialize in producing goods for which it has the lowest opportunity cost, leading to increased economic efficiency.

Opportunity Cost

The sacrifice of potential gains from other possibilities when a specific alternative is opted for.

Absolute Advantage

A condition in which a country, individual, or firm can produce a good or service at a lower cost per unit than competitors.