Which of the following statements is correct?
A) If capital is idle, the economy is producing at its full potential.
B) The production possibilities frontier shows that there are no limits to production.
C) A tradeoff is a limit that forces an exchange or a substitution of one thing for something else.
D) Any point on or within the PPF is production efficient.
E) None of the above answers is correct.

Question

Quizplus · Accepted Answer

A tradeoff is a concept in economics that implies a sacrifice or compromise when making a decision or choice. It is a situation whereby an individual has to choose between two or more alternatives, and in making that choice, they have to give up one alternative for the other. Thus, Option C is the correct statement since it defines the meaning of a tradeoff in economics and explains it accurately. The other options are incorrect since they are based on wrong economic principles.

Which of the Following Statements Is Correct