Question

13. A production possibilities curve shows economic efficiency,

Answer 1

Answer:

Answer is option D i.e. Economic growth and opportunity cost.

Explanation:

A production possibility curve, also known as Production Possibility Frontier, is the curve that denotes the possibility of producing two separate goods, and that too when there is a fixed number of resources available which is required by both the category of goods equally. Here, the production possibility curve plays an important role to decide on which category of the goods should be produced that will enhance economic growth and efficiency. As both the category cannot be produced as the number of resources available is limited, therefore, here we have to bear the opportunity cost of the goods that are laid off. Thus, a production possibility curve shows economic efficiency, economic growth, and an opportunity cost.