Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3

-Which of the following ideas is illustrated by the production possibilities curve [PPC]?

Question

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.Table 2.3
 
-Which of the following ideas is illustrated by the production possibilities curve [PPC]?

Quizplus · Accepted Answer

The production possibilities curve illustrates the concept of opportunity cost, which is the idea that when an economy chooses to produce a combination of goods and services, it must sacrifice other possible combinations. The curve shows the maximum possible output combinations of two goods, given the resources and technology available. Any point outside the curve is unattainable, while any point inside the curve is inefficient. Therefore, the best choice is D, which accurately reflects the concept illustrated by the PPC. The other choices - A, B, C, and E - are incorrect because they do not accurately capture the concept of opportunity cost illustrated by the PPC.

Given Below Is the Production Possibilities Schedule for a Small