Final answer:
The statement is false because a Production Possibilities Frontier (PPF) is used to demonstrate tradeoffs in an economy. The PPF curve illustrates the maximum combinations of two goods that can be produced with available resources, showing the tradeoff between the two when shifting resources from one to the other.
Step-by-step explanation:
The statement is false; Production Possibilities Frontiers (PPFs) are specifically used to illustrate tradeoffs. The PPF is a graph that shows the various combinations of two goods or services that an economy can produce efficiently with its limited resources at a given time. The curve of the PPF represents maximum possible production levels. Any point on the curve indicates that resources are fully utilized, while points inside the curve indicate underutilization and points outside the curve are unattainable given current resources and technology.
A PPF is typically drawn as a curve and not a straight line to represent the concept of increasing opportunity costs. As production of one good increases, resources that are not perfectly adaptable to the production of both goods must be reallocated, and thus the opportunity cost of producing the additional good rises. This increasing cost results in a bowed-out shape of the curve. Various points along the curve (like Points A, C, D, and E mentioned in the sample) represent the tradeoff between producing more of one good at the expense of producing less of the other. Therefore, the PPF is an excellent tool to help understand these economic tradeoffs and the concept of opportunity cost.