The production possibility frontier shows:
A) how society can produce more of one good without giving up the production of another good.
B) what people can consume given different combinations of goods produced.
C) the combinations of output that an economy can produce given its productivity and inputs.
D) the types of goods and services that society should produce to satisfy social interest.

Question

Quizplus · Accepted Answer

The production possibility frontier (PPF) shows the maximum combinations of two goods that an economy can produce given its resources and technology. It represents the trade-offs and opportunity costs between producing one good versus another. Thus, option C is the correct answer as it aligns with the definition of the PPF. Option A is incorrect because the PPF does not indicate how society can produce more of one good without sacrificing the production of another. Option B is incorrect because the PPF does not solely focus on people's consumption, but rather on what can be produced. Option D is incorrect because the PPF does not suggest what should be produced to satisfy social interests, but rather displays the possible production combinations.

The Production Possibility Frontier Shows