The production possibilities curve illustrates the basic principle that
A) an economy's capacity to produce increases in proportion to its population.
B) if the resources of an economy are being used efficiently, more of one good can be produced only if less of another is produced.
C) an economy will automatically seek the output at which all of its resources are fully employed.
D) the distribution of income among households is the major determinant of the economic welfare of a nation.

Question

Quizplus · Accepted Answer

The production possibilities curve demonstrates the trade-offs between two goods, showing that to produce more of one good, the economy must produce less of another if resources are used efficiently.

The Production Possibilities Curve Illustrates the Basic Principle That