A certain cowboy spends 10 hours per day mending fences and herding cattle.For the cowboy,a graph that shows his various possible mixes of output (fences mended per day and cattle herded per day)is called his
A) line of tastes.
B) trade-off curve.
C) production possibilities frontier.
D) consumption possibilities frontier.

Question

Quizplus · Accepted Answer

The graph that shows the various possible mixes of output for the cowboy (fences mended per day and cattle herded per day) is known as his production possibilities frontier (PPF) because it illustrates the maximum amount of output that can be obtained by him given his limited resources (i.e. 10 hours per day). The PPF shows the trade-offs between the two outputs, indicating that increasing one output will lead to a decrease in the other output, illustrating the concept of opportunity cost. Therefore, the best choice is C.

A Certain Cowboy Spends 10 Hours Per Day Mending Fences