Question

What does the term 'boundary' refer to in the context of production possibilities?

1) The limit on the combinations of goods and services that can be produced given the resources and current state of technology
2) The point at which all resources are fully utilized and there is no waste
3) The maximum level of production that can be achieved with the available resources
4) The point at which the production of one good or service must be sacrificed in order to produce more of another good or service

Answer 1

The term 'boundary' in the context of production possibilities refers to the limit on the combinations of goods and services that can be produced given the resources and current state of technology.

Step-by-step explanation:

In the context of production possibilities, the term 'boundary' refers to option 1) the limit on the combinations of goods and services that can be produced given the resources and current state of technology. This is often represented by a production possibilities frontier (PPF), which shows the maximum level of production that can be achieved with the available resources. The PPF represents the trade-off between producing one good or service and another, indicating the point at which the production of one must be sacrificed to produce more of another.