A fundamental idea behind the production possibilities frontier is:
A) the idea of absolute advantage.
B) the presence of trade-offs in production.
C) that economic growth is unlimited.
D) that incentives matter.

Question

Quizplus · Accepted Answer

The production possibilities frontier reflects the presence of trade-offs in production, meaning that in order to produce more of one good, a society must give up some production of another good. This is a fundamental concept in economics and is captured by the shape of the PPF curve, which illustrates the maximum combinations of goods that can be produced given a fixed set of resources and technology. The other answer choices are not directly related to the concept of the PPF.

A Fundamental Idea Behind the Production Possibilities Frontier Is