The production possibilities frontier illustrates
A)the combinations of output that an economy should produce.
B)the combinations of output that an economy should consume.
C)the combinations of output that an economy can produce.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) depicts the combinations of output that an economy is capable of producing given its available resources and technology. It shows the maximum quantities of two goods that can be produced with given resources and technology. Therefore, Choice C is the correct answer. Choices A and B are not accurate as the PPF doesn't specify what an economy "should" produce or consume, but rather what it is capable of producing.

The Production Possibilities Frontier Illustrates