Figure 2.1
-The production possibilities curve in Figure 2.1 illustrates the notion of
A) increased manufactured goods production.
B) increased agricultural production.
C) diminishing resources.
D) opportunity cost.

Question

Figure 2.1
-The production possibilities curve in Figure 2.1 illustrates the notion of
A) increased manufactured goods production. 
B) increased agricultural production. 
C) diminishing resources. 
D) opportunity cost.

Quizplus · Accepted Answer

The production possibilities curve illustrates the concept of opportunity cost, which is the trade-off between two options when choosing to produce one good over another. The curve shows the maximum combination of goods that can be produced with the available resources. As one moves along the curve, the opportunity cost of producing one good increases as more of the other good is produced. Thus, the curve demonstrates the concept of scarcity and the need to make choices.

Figure 2.1 -The Production Possibilities Curve in Figure 2.1 Illustrates the Notion