alleryStart learning →A production possibility frontier shows the
AMaximum output combinations
BMinimum cost of output
CPrice of each good
DDemand for two goods
Answer & Solution
Correct answer: A. Maximum output combinations
A PPF shows all possible output quantities when given resources are fully and efficiently utilised.
Keep practising Basic Problems of an Economy and Role of Price Mechanism
Browse all Basic Problems of an Economy and Role of Price Mechanism questions for CA Foundation, or explore more Business Economics topics.
Related questions
Malthus argued that population grows exponentially while food supply growsAbsolute scarcity is the condition where human requirements areThe least-cost method of production relates to the problem ofMaking 100 tonnes of tea costs Country A 20 tonnes of wool. The cost per tonne of tea isA country has comparative advantage if it produces a good at a lowerAccounting profit differs from economic profit because accounting ignoresThe opportunity cost of using firm-owned resources is itsOut-of-pocket costs of a firm, easily identified, are called