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19 March, 14:19

A production possibilities frontier (PPF) is

A. a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.

B. a curve that shows the potential productive capabilities of the frontier (defined as the area outside of cities) of a developing economy.

C. a curve that illustrates the demand of two goods for the average consumer.

D. a curve showing the generally attainable combinations of two products that may be produced with all planned or potential, yet undeveloped technology.

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  1. 19 March, 17:26
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    The correct answer is option A.

    Explanation:

    A production possibility curve or frontier is a curve concave to the origin. It shows the maximum attainable bundles of two goods that can be produced using the given resources and level of technology.

    The curve has a concave shape because of increasing opportunity cost. With the limited resources, we need to sacrifice the production of one good if we want to increase the production of the other.
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