A country that must decrease production of one good in order to increase the production of another
A) must be using resources inefficiently.
B) must be producing on its production possibilities frontier.
C) must be producing beyond its production possibilities frontier.
D) must have private ownership of property.

Question

Quizplus · Accepted Answer

When a country must decrease production of one good to increase production of another, it indicates that the country is operating on its production possibilities frontier (PPF), which represents the maximum combination of goods or services that can be produced with a given amount of resources and technology. This scenario implies efficient use of resources, where to produce more of one good, the production of another must be sacrificed, reflecting opportunity cost.

A Country That Must Decrease Production of One Good in Order