Question

A production possibilities frontier shows the combinations of goods a country can produce in one year if it uses its resources fully and efficiently.

Answer 1

A production possibilities frontier (PPF) shows the combinations of goods a country can produce given its resources and technology. It highlights the trade-offs and opportunity costs between different goods. Choices outside the PPF are unattainable, while choices inside the PPF are inefficient.

Step-by-step explanation:

A production possibilities frontier (PPF) shows the combinations of goods a country can produce if it uses its resources fully and efficiently. The PPF represents the maximum production levels of two different goods given the available resources and technology. The shape of the PPF is typically curved outward, indicating that there is an opportunity cost to producing more of one good at the expense of the other. Choices outside the PPF are unattainable with the given resources, while choices inside the PPF are inefficient and represent underutilization of resources.