A graphical representation which shows the trade-off that occurs when more of one output is obtained at the expense of another is called
A) a scarcity curve.
B) a production possibilities curve.
C) a growth curve.
D) a supply curve.

Question

Quizplus · Accepted Answer

A production possibilities curve (PPC) is a graphical representation that shows the various combinations of two goods that an economy can produce using its limited resources and technology. It illustrates the trade-off that occurs when more of one output is obtained at the expense of another. The PPC is concave to the origin, indicating that as more of one good is produced, the opportunity cost of producing an additional unit of that good increases. Thus, the PPC demonstrates the concept of scarcity and the need to make choices among alternatives. Scarcity curve, growth curve, and supply curve are not appropriate terms for this definition.

A Graphical Representation Which Shows the Trade-Off That Occurs When