A country's production possibilities boundary shows that
A)when a society combines its resources efficiently,it cannot produce more of one good without producing less of the other good.
B)when a society combines its resources inefficiently,it cannot produce more of one good without producing less of the other good.
C)when a society combines its resources efficiently,it is always possible to produce more of all goods.
D)all points inside the boundary are preferred to all points on the boundary.
E)the supply for goods always exceeds the demand.

Question

Quizplus · Accepted Answer

A country's production possibilities boundary (PPB) represents the maximum amount of two goods that a country can produce given its resources and technology. The shape of the PPB shows the opportunity cost of producing one good in terms of the other. Therefore, if a society is producing at a point on the PPB, it cannot produce more of one good without producing less of the other. This implies that the resources are being used efficiently and any increase in production of one good requires a decrease in production of the other good.

A Country's Production Possibilities Boundary Shows That