Use the figure below to answer the following questions.
Figure 2.1.6
-Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF _______ illustrate scarcity because _______.
A)does; as more is produced, consumers must pay a higher price
B)does not; the PPF is downward sloping
C)does not; the firm can produce any quantity it wants if it is willing to charge a high enough price
D)does not; scarcity does not occur in the market for pet food
E)does; the firm cannot produce points outside the frontier, and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food

Question

Use the figure below to answer the following questions.
  Figure 2.1.6
-Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food.This PPF _______ illustrate scarcity because _______.
A)does; as more is produced, consumers must pay a higher price 
B)does not; the PPF is downward sloping 
C)does not; the firm can produce any quantity it wants if it is willing to charge a high enough price 
D)does not; scarcity does not occur in the market for pet food 
E)does; the firm cannot produce points outside the frontier, and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food

Quizplus · Accepted Answer

The PPF in Figure 2.1.6 illustrates scarcity because it shows the limited resources of the firm, represented by the two types of pet food it produces. As the firm moves along the PPF, it cannot produce more of one type of pet food without producing less of the other type, indicating that resources are limited and trade-offs are necessary. Therefore, the correct answer is (E) - the PPF does illustrate scarcity.

Use the Figure Below to Answer the Following Questions