A production possibilities frontier shows
A) the various combinations of output a nation can produce a certain time, given its available resources and technology.
B) the limits to future growth of a nation.
C) how money can be allocated among two kinds of goods.
D) that if price of one good decreases, the price of the other has to increase.
E) that it is impossible to produce inefficiently.

Question

Quizplus · Accepted Answer

A production possibilities frontier illustrates the different combinations of two products that an economy can produce given the available resources and technology. It serves as a summary of the maximum amount of goods and services that can be produced by an economy when all resources are fully and efficiently utilized. Thus, it presents a visual representation of the limits and trade-offs involved in the production process.

A Production Possibilities Frontier Shows