The production possibilities frontier is a graph that shows the various combinations of output that an economy can possibly produce given the available factors of production and
A)society's preferences.
B)the available production technology.
C)a fair distribution of the output.
D)the available demand for the output.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) shows the maximum possible combinations of two goods that an economy can produce assuming that all resources are fully employed and efficiently allocated. As such, the position and shape of the PPF are determined only by the available production technology, which sets the efficiency and productivity of labor, capital, and natural resources. Society's preferences, fair distribution of output, and demand do not directly affect the PPF, although they may influence the choices made along the PPF, depending on the economic and political institutions in place.

The Production Possibilities Frontier Is a Graph That Shows the Various