Which one of the following statements is true with regard to an economy which is on its production possibility frontier?
- A.The economy has to sacrifice some production of one commodity in order to increase the production of another commodity
- B.There is no limit or constraint for the economy in the production of goods and services
- C.The economy can produce more of one commodity up to a point without reducing the production of any other commodity
- D.Its production possibility frontier is an upward sloping curve
Show answer
On the frontier all resources are fully and efficiently used, so producing more of one good is possible only by giving up some of the other.
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