Question 46

If the country specializes at point R on PPC, it is producing only good X.

Specialization at point R on the Production Possibility Curve (PPC) indicates that the country is allocating all its resources to the production of good X, resulting in the maximum output of that good alone.

A) only good X

This option is correct because specialization at a specific point on the PPC signifies that resources are fully dedicated to producing only one good. At point R, the country is not producing any of good Y, thus focusing entirely on good X.

B) only good Y

This option is incorrect as specializing at point R implies that the country is not producing any good Y. If the country were to focus solely on good Y, it would be located at a different point on the PPC, specifically at the point where good Y's production is maximized.

C) equal amounts

This option is incorrect because producing equal amounts of both goods would require the country to be at a different point on the PPC, typically along the line where both goods are balanced. Point R indicates a complete focus on good X, not an equal distribution.

D) inside PPC

This option is incorrect since being inside the PPC indicates inefficient use of resources. If the country is specializing at point R, it is operating on the PPC, which represents maximum efficiency in producing good X.

Conclusion

The correct answer is A, as specialization at point R on the PPC clearly denotes that the country is producing only good X. Options B, C, and D fail to represent this scenario correctly, as they either mischaracterize the production focus or suggest inefficiencies in resource allocation.