A reason the production possibilities frontier exists is
A) unlimited resources and technology.
B) scarcity of resources.
C) scarcity of resources and unlimited technology.
D) unemployment.
E) that people's wants are unlimited.

Question

Quizplus · Accepted Answer

The production possibilities frontier exists because of scarcity of resources. Since resources are limited, every economy must choose how to allocate them between different uses. This choice leads to a trade-off between producing different goods and services, and the production possibilities frontier represents this trade-off. It illustrates the maximum combinations of goods and services that can be produced with the given resources and technology.

A Reason the Production Possibilities Frontier Exists Is