Final answer:
A production possibilities curve represents a combination of two goods that can be produced using limited resources, illustrating scarcity, trade-offs, and efficiency in an economy.
Step-by-step explanation:
The correct answer is OD: a combination of two goods that can be produced using limited resources. A production possibilities curve (PPC) is a graph that shows the different quantities of two goods that an economy can produce with a certain amount of resources. It is a representation of scarcity, choices, and opportunity costs in an economy. The PPC is typically a downward-sloping curve, which illustrates the tradeoff between the production of two different goods. When resources are allocated to the production of one good, it comes at the expense of producing less of the other good.
Moreover, the production possibilities frontier (PPF) is an extended concept of the PPC, which shows the maximum possible output combinations that can be achieved with current resources and technology. Points on the curve represent efficient production levels, whereas points inside the curve represent inefficient use of resources, and points outside the curve are unattainable given the current resources and technology. Over time, with economic growth, the PPF can shift outward, representing increased production capabilities.