The production possibilities frontier shows:
A) the combinations of outputs a country can produce given its resources and productivity.
B) the combinations of inputs that a country has given its outputs and productivity.
C) the combinations of outputs and resources that a country possesses given its productivity.
D) the maximum level of a country's productivity given its resources and outputs.

Question

Quizplus · Accepted Answer

The production possibilities frontier shows the different combinations of goods and services that a country can produce given its resources and level of productivity. It illustrates the trade-offs that a country must make between producing one good versus another. The curve represents the maximum output that can be produced given the resources available to the country, and any point on or inside the curve is attainable, while any point outside the curve is unattainable with the given resources and technology.

The Production Possibilities Frontier Shows