The production possibilities curve shows:
A)the minimum production of one good for every possible production level of the other good.
B)how increasing the resources used to produce one good increases the production of the other good.
C)the maximum production of one good for every possible production level of the other good.
D)how increasing the production of one good allows production of the other good to also rise.

Question

Quizplus · Accepted Answer

The production possibilities curve shows the maximum production of one good for every possible production level of the other good. It represents the trade-offs a society faces when allocating its scarce resources between two different goods, assuming that all resources are being used efficiently. The curve illustrates that producing more of one good necessarily means producing less of the other, as the opportunity cost of producing one good is the production of the other forgone. Therefore, the production possibilities curve is concave, reflecting the law of diminishing marginal returns.

The Production Possibilities Curve Shows