Scarcity is represented on a production possibilities frontier figure by
A) technological progress.
B) the fact that there are only two goods in the diagram.
C) the fact there are attainable and unattainable points.
D) the amount of the good on the horizontal axis forgone.

Question

Quizplus · Accepted Answer

Scarcity is represented on a production possibilities frontier by the fact that there are attainable and unattainable points. This shows that there are limited resources and only a certain amount of goods and services that can be produced with those resources. Technological progress (A) can help increase production possibilities, but it does not directly represent scarcity. The fact that there are only two goods in the diagram (B) is a choice made by the modeler and does not necessarily represent scarcity. The amount of the good on the horizontal axis forgone (D) is a result of scarcity, but it is not the representation of scarcity on the production possibilities frontier.

Scarcity Is Represented on a Production Possibilities Frontier Figure by