If Sam is producing at a point on his production possibilities frontier, then he
A) can produce more of one good only by producing less of the other.
B) will be unable to gain from trade.
C) cannot produce any more of either good.
D) is not subject to scarcity.

Question

Quizplus · Accepted Answer

When Sam is producing at a point on his production possibilities frontier, he is fully utilizing all of his resources to produce a combination of two goods. If he wants to produce more of one good, he can only do so by sacrificing some units of the other good, thereby remaining on the production possibilities frontier. Thus, Option A is the correct choice. Option B is incorrect because Sam can still engage in trade with other producers who are producing at different points on their respective production possibilities frontiers. Option C is incorrect because Sam can produce more of either good by increasing his resources or improving his technology. Option D is incorrect because Sam, like every producer, is subject to scarcity since he has limited resources at his disposal to produce goods and services.

If Sam Is Producing at a Point on His Production