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Question
Which of these statements is true about production possibility curve?
Options
It shows various combinations of two goods which yield same level of satisfaction
It shows various combination of two goods which an economy can produce with a given amount of resources and technology
It shows various combination of two goods which an economy can produce with a given budget
It shows various combination of two goods which an economy can produce with a given time
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Solution
It shows various combination of two goods which an economy can produce with a given amount of resources and technology.
Explanation:
A production possibility curve shows the various combinations of two goods that an economy can produce with given resources and technology. It is not about satisfaction, budget, or time.
