Use the figure below to answer the following questions.

Figure 2.1.6
-Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food. This PPF ________ illustrate scarcity because ________.
A)does; the firm cannot produce points outside the frontier, and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food
B)does not; the firm can produce any quantity it wants if it is willing to pay a high enough price
C)does not; the PPF is downward sloping
D)does; as more is produced, consumer must pay a higher price
E)does not; scarcity does not occur in the market for pet food

Question

Use the figure below to answer the following questions.
  
Figure 2.1.6
-Figure 2.1.6 shows the production possibilities frontier for a firm that produces pet food. This PPF ________ illustrate scarcity because ________.
A)does; the firm cannot produce points outside the frontier, and as the firm moves along the PPF, it cannot produce more dog biscuits without producing less cat food 
B)does not; the firm can produce any quantity it wants if it is willing to pay a high enough price 
C)does not; the PPF is downward sloping 
D)does; as more is produced, consumer must pay a higher price 
E)does not; scarcity does not occur in the market for pet food

Quizplus · Accepted Answer

The PPF in Figure 2.1.6 illustrates scarcity because it shows that the firm cannot produce points outside the frontier, and as it moves along the PPF, it cannot produce more of one good without producing less of the other. This trade-off reflects the reality that resources are scarce and must be allocated efficiently.

Use the Figure Below to Answer the Following Questions