Refer to the diagram below.Points A, B, C, D, and E show:
A)that the opportunity cost of bicycles increases, while that of computers is constant.
B)combinations of bicycles and computers which society can produce by using its resources efficiently.
C)that the opportunity cost of computers increases, while that of bicycles is constant.
D)that society's demand for computers is greater than its demand for bicycles.

Question

Refer to the diagram below.Points A, B, C, D, and E show: 
A)that the opportunity cost of bicycles increases, while that of computers is constant. 
B)combinations of bicycles and computers which society can produce by using its resources efficiently. 
C)that the opportunity cost of computers increases, while that of bicycles is constant. 
D)that society's demand for computers is greater than its demand for bicycles.

Quizplus · Accepted Answer

The diagram shows the production possibilities frontier (PPF) which represents the maximum combinations of bicycles and computers that society can produce given its resources and technology. Points on the PPF represent efficient production while points inside the PPF represent underutilization of resources. Therefore, answer B is the best choice as it accurately describes the meaning of the diagram.

Refer to the Diagram Below