A country's production possibilities boundary shows that
A)when a society combines its resources inefficiently,it cannot produce more of one good without producing less of the other good.
B)all points inside the boundary are preferred to all points on the boundary.
C)when a society combines its resources efficiently,it cannot produce more of one good without producing less of the other good.
D)when a society combines its resources efficiently,it is always possible to produce more of all goods.
E)the supply for goods always exceeds the demand.

Question

Quizplus · Accepted Answer

The production possibilities boundary is also known as the production possibilities frontier (PPF). It shows the maximum combinations of two goods that can be produced with the given resources and technology. Points inside the frontier are inefficient, meaning resources are not being used to their full potential. Points on the frontier are efficient, and any movement along the frontier involves a trade-off between producing more of one good at the expense of producing less of the other good. Since the PPF represents the maximum output that can be achieved with given resources, it is not always possible to produce more of all goods. Therefore, option C is the correct choice.

A Country's Production Possibilities Boundary Shows That