The production possibilities curve illustrates:

Question

Quizplus · Accepted Answer

The production possibilities curve shows the maximum combination of two goods that can be produced using available resources and technology. It illustrates the concept of opportunity cost, which means that if more of one good is produced, then less of the other good can be produced. When resources are used efficiently, an increase in the production of one good will only be possible by sacrificing some of the other good. Thus, option C is the correct answer. Option A is incorrect because it does not show the quantity of two resources needed to produce a given level of output. Option B is incorrect because it only applies to inefficient usage of resources, whereas the production possibilities curve applies to both efficient and inefficient usage. Option D is incorrect because it does not consider the trade-off between two goods.

The Production Possibilities Curve Illustrates