contestada

A country cannot produce a mix of products with a higher value than where __________. a. the isovalue line is below the production possibility frontier. b. the isovalue line is tangent with the indifference curve. c. the isovalue line is above the production possibility frontier. d. the isovalue line intersects the production possibility frontier. e. the isovalue line is tangent to the production possibility frontier.

Respuesta :

Answer:

The correct option is E

Explanation:

Isovalue lines define a relationship between the production of 2products in which the total market value is constant.

Value of the output can be calculated with following formula:

V= Pi*Qi+Pj*Qj

All industries try to achieve the highest value of the output that is possible. This can happen at point where isovalue line is tangent to PPF.

Otras preguntas