If a Production Possibilities Frontier intersects an isorevenue line at two points, then:

Question

Quizplus · Accepted Answer

If the PPF intersects an isorevenue line at two points, it means that there are two possible combinations of goods that can be produced to generate the same level of revenue. However, it does not necessarily mean that both combinations will result in maximum revenue. It is possible that a higher isorevenue line intersects the PPF at a point that generates higher revenue, indicating that profits could be higher on a higher isorevenue line. Additionally, it is also possible that there is a lower isorevenue line where the PPF intersects at only one point, indicating that a lower level of production could still generate the same level of revenue. Therefore, the best choice is B.

If a Production Possibilities Frontier Intersects an Isorevenue Line at Two