The production possibilities frontier shows
A)the various products that can be produced now and in the future.
B)the maximum attainable combinations of two products that may be produced in a particular time period with available resources.
C)what an equitable distribution of products among citizens would be.
D)what people want firms to produce in a particular time period.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) represents the maximum amount of two goods that can be produced using all available resources efficiently. It shows the trade-off between producing one good versus another, given limited resources. The PPF is a curve that reflects the opportunity cost of producing one good in terms of the other, given the available resources. Therefore, the correct answer is B. Option A is incorrect because it does not imply anything about the maximum attainable combinations. Option C is speculative and not related to the PPF at all. Option D is incorrect because the PPF does not reflect what people want or need.

The Production Possibilities Frontier Shows