The production possibilities frontier (PPF)shows
A) the trade-off between the efficient production of two different goods.
B) the difference between microanalysis and macroanalysis.
C) the difference between normative and positive analysis.
D) how a firm should price a new product.
E) how price and quantity are related for a single good.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) illustrates the trade-off between producing two different goods with limited resources. That is, it shows the maximum quantity of one good that can be produced for each possible quantity of the other good that can be produced, assuming that all resources are fully utilized and used efficiently. Therefore, Choice A is the best option.

The Production Possibilities Frontier (PPF)shows