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 represents the maximum output a country can produce with its given resources and technology. This implies that there are limits to what an economy can produce. The curve exists because resources are scarce, and there is a trade-off between producing goods and services, given these scarce resources. Therefore, the correct choice is A, which states that the production possibilities curve illustrates the limitations that exist because of scarce resources.

The Production Possibilities Curve Illustrates