The production possibilities curve illustrates
A)The limitations that exist because of scarce resources.
B)That there is no limit to what an economy can produce.
C)That there is no limit to the level of output.
D)The existence of unlimited wants and resources.

Question

Quizplus · Accepted Answer

The production possibilities curve shows the different combinations of two goods that can be produced by an economy given its resources, technology, and efficiency. The curve demonstrates that there are limits to what an economy can produce, as resources are scarce and must be used efficiently. Therefore, choice A, which reflects the limitations due to scarce resources, is the best answer. Choices B and C are incorrect because they suggest that there are no limits to production, which is not realistic. Choice D is also incorrect because it suggests that resources are unlimited, which is not true.

The Production Possibilities Curve Illustrates