Question

Any point on a country's production possibilities frontier represents a combination of two goods that an economy Select one: a. will never be able to produce. b. can produce using all available resources and technology. c. can produce using some portion, but not all, of its resources and technology. d. may be able to produce in the future with more resources and/or superior technology.

Answer 1

Answer:

The correct answer is option b.

Explanation:

A production possibilities frontier or curve shows the different combinations or bundles of two goods that can be produced using all resources and technology that is available.

We know that we have limited resources that have alternative uses. To increase the production of one good we need to sacrifice production of the other.

That is why a production possibility curve is a downward-sloping curve. It is concave to the origin because of increasing opportunity cost.

The points on the curve show the efficient and attainable bundles. The point below the curve is attainable but inefficient as resources are not fully utilized. The points above the curve show unattainable bundles.