Question

What does a production possibilities frontier show?
a.
scarce and less scarce resources
b.
global trade-offs and costs of doing business
c.
an economy that is producing but not at the maximum
d.
the maximum amount that an economy can produce

Answer 1

d. the maximum amount that an economy can produce

Brief explanation: A production possibilities frontier shows the combinations of two goods an economy can produce using all available resources and technology efficiently (the boundary). Points inside the curve mean resources are underused; points outside are unattainable with current resources. It also illustrates opportunity cost (trade-offs).