If Sam is producing at a point on his production possibilities frontier, then he
A) cannot produce any more of either good.
B) can produce more of one good only by producing less of the other.
C) will be unable to gain from trade.
D) is not subject to scarcity.

Question

Quizplus · Accepted Answer

Producing on the production possibilities frontier (PPF) means that an economy or individual is operating at maximum efficiency, utilizing all available resources. At this point, to produce more of one good, resources must be reallocated from the production of another good, resulting in less of the other good being produced. This is due to the principle of opportunity cost and the trade-offs involved in allocating scarce resources.

If Sam Is Producing at a Point on His Production