The points at which a country-s production possibilities frontier touches each of the coordinate axes measure:
A) the redistributive effect of opting for one technology over another.
B) the redistributive effect of trading one item rather than another.
C) the levels of output that can be produced if resources that otherwise could produce other items are left idle and unused.
D) the maximum quantities of each good that residents can produce using all resources.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) shows the maximum quantities of goods that a country can produce using all of its resources efficiently. The points at which the PPF intersects with each of the two axes represent the maximum quantity of one good that can be produced if all resources are devoted to that good, while none are used for the other good. Therefore, the points touching the two axes represent the maximum quantities of each good that can be produced using all resources.

The Points at Which a Country-S Production Possibilities Frontier Touches