A society that is producing its maximum combination of goods and using all available resources for production:
A) has minimized its opportunity cost.
B) has maximized its opportunity cost.
C) is operating on its production possibilities frontier (PPF).
D) is operating outside its production possibilities frontier (PPF).
E) has eliminated scarcity.

Question

Quizplus · Accepted Answer

Operating on the production possibilities frontier (PPF) means that the society is producing at its maximum potential with the resources available. This also means that any shift towards producing more of one good will result in producing less of another good. Therefore, the society has not eliminated scarcity but rather is making the most efficient use of its resources.

A Society That Is Producing Its Maximum Combination of Goods