Points outside the production possibility curves shows

Step 1: Analyze the question The question asks what a point outside the production possibility curve (PPC) represents.

Step 2: The concept The PPC (or production possibility frontier) shows the maximum combinations of two goods an economy can produce when it uses all its resources fully and efficiently, with the current level of technology.

There are three zones on a PPC graph:

• On the curve: resources are fully and efficiently used. This is attainable.
• Inside the curve: resources are underutilized or unemployed, so output is below capacity. This is attainable but inefficient.
• Outside the curve: the economy would need more resources or better technology than it has. This is not attainable at present.

Step 3: Check the options

• A. Unequal allocation of resources among factors: not what the PPC shows.
• B. Capital production level: not a PPC concept.
• C. Under utilization of resources: this describes points inside the curve, not outside.
• D. Unattainable production level: correct. Given current resources and technology, the economy cannot reach points beyond the frontier.
• E. Effective consummation of resources: meaningless in this context.

Step 4: Answer Points outside the PPC are unattainable production levels. The economy can only reach them if its resources grow (for example, more labour or capital) or its technology improves, which would shift the whole curve outward.

Exam tip: Remember "I-U, O-U": Inside = Underutilization, Outside = Unattainable. On the curve = efficient.