A two-dimensional production possibility frontier illustrates the _____ facing an economy that _____ only two goods.

Question

Quizplus · Accepted Answer

A production possibility frontier (PPF) shows the maximum amount of two goods that an economy can produce given its resources and technology. It illustrates the trade-offs facing the economy because producing more of one good necessitates producing less of the other good. The PPF does not show prices or shortages but rather the efficient combinations of production given the resources available. Therefore, choice B is the correct answer.

A Two-Dimensional Production Possibility Frontier Illustrates the _____ Facing an Economy