The production possibilities frontier
A) depicts the boundary between those combinations of goods and services that can be produced and those that cannot, given resources and the current state of technology.
B) shows how many goods and services are consumed by each person in a country.
C) is a model that assumes there is no scarcity and no opportunity cost.
D) is a graph with price on the vertical axis and income on the horizontal axis.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) illustrates the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized, given the current state of technology. It highlights the trade-offs in production volume between two choices, reflecting the idea of opportunity cost and the limits set by available resources and technology. Choices B, C, and D do not accurately describe the PPF.

The Production Possibilities Frontier