Question

A production possibilities frontier​ (PPF) is

A. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.
B. a curve that shows the potential productive capabilities of the frontier​ (defined as the area outside of​ cities) of a developing economy.
C. a curve that illustrates the demand of two goods for the average consumer.
D. a curve showing the generally attainable combinations of two products that may be produced with all planned or​ potential, yet undeveloped technology.

Answer 1

The correct answer is option A.

Step-by-step explanation:

A production possibility curve or frontier is a curve concave to the origin. It shows the maximum attainable bundles of two goods that can be produced using the given resources and level of technology.

The curve has a concave shape because of increasing opportunity cost. With the limited resources, we need to sacrifice the production of one good if we want to increase the production of the other.