Question

The production possibility frontier is used to illustrate the concept of A) the laissez-faire economy. B) opportunity costs. C) equilibrium. D) aggregate demand.

Answer 1

Answer:

B) opportunity costs.

Explanation:

The production possibility frontier is used to illustrate the concept of opportunity costs. The production possibility frontier shows the combination of goods which can be produced by making use of all the available resources in an economy. In order to produce an extra unit of one good, some amount of other good has to be sacrificed. This is known as opportunity cost.