The production possibilities frontier refers to_______________?
Correct answer: A. the amount of each commodity that can be produced given available resources
- A. the amount of each commodity that can be produced given available resources
- B. unlimited production of one commodity
- C. limitless output of commodities
- D. none of the above
Explanation
The production possibilities frontier shows the maximum attainable combinations of two goods with given resources and technology. It therefore represents the available production choices, not unlimited output.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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