Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.

The Production Possibilities Frontier (PPF) is an economic model that represents the possible combinations of two goods or services that a society can produce, given its limited resources and technology. It is a graphical representation of the trade-offs and constraints faced by an economy when allocating its scarce resources. The points on the frontier represent the maximum output of one good without reducing the output of the other.

There are two main reasons why societies cannot make a choice above the PPF: a. Limited resources: An economy's resources, such as labor, capital, and natural resources, are scarce. The PPF takes into account the maximum amount of resources that can be utilized to produce a combination of goods without compromising the production of other goods. Any point above the PPF represents a combination of goods that requires more resources than the economy has available. b. Existing technology: Technology plays a significant role in determining productivity and the production possibilities of an economy. The PPF is drawn based on the current production technologies available. Choosing a point above the PPF would mean that the economy has achieved a higher level of production than is currently feasible with existing technology. Therefore, any point above the PPF is unattainable for a society given its current resources and technology.

Choosing a point below the PPF indicates that the economy is not utilizing its resources efficiently. There are three main reasons why an economy should not make a choice below the PPF: a. Allocative inefficiency: When an economy chooses a point below the PPF, it is not allocating its scarce resources optimally and is not producing the highest possible output given its resources and technology. This leads to a loss of potential output and a lower overall standard of living. b. Opportunity cost: By choosing a point below the PPF, the economy is essentially leaving some resources unutilized or inefficiently utilized. This results in higher opportunity costs, as these unutilized or poorly utilized resources could have been used to produce additional goods or services elsewhere in the economy. c. Economic growth: An economy operating below the PPF is not realizing its full potential for economic growth and development, as it is not using its resources efficiently. By reallocating resources and improving productivity, the economy could move closer to or on the PPF, resulting in an increase in economic growth and a higher overall standard of living. In conclusion, societies cannot make a choice above their production possibilities frontier due to limited resources and existing technology, and they should not make a choice below it to avoid inefficiencies, high opportunity costs, and hindered economic growth.