The production possibilities curve:

A. indicates that any combination of goods lying outside the curve is economically inefficient.

B. is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced.

C. shows all of those levels of production that are consistent with a stable price level.

D. shows all of those combinations of two goods that are most preferred by society.

Question

Ramon Rush

Business

1 July, 11:38

The production possibilities curve:

A. indicates that any combination of goods lying outside the curve is economically inefficient.

B. is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced.

C. shows all of those levels of production that are consistent with a stable price level.

D. shows all of those combinations of two goods that are most preferred by society.

+2

Answers (1)

Know the Answer?

Abram Curtis · Answer 1

The correct answer is letter "B": is a frontier between all combinations of two goods that can be produced and those combinations that cannot be produced.

Explanation:

A variety of answers to the question: "What is our optimum production capacity?" solves the Production Possibility Frontier (PPF). Increased output requires job creation and the best efficient use of resources. This maximizes the labor force available and reduces the services that are not used.

Plotted in a graph, PPF reflects the possible combinations an organization has and how to optimize output as well as what combinations are not to be produced.