Answer to Question #234689 in Economics for Sam

Question

What is the direction of a linear production possibility frontier

Answer 1

As you know, the main problem of the economy is the satisfaction (or rather, its impossibility) of unlimited human needs in conditions of limited available resources. The limited number of resources we have allows us to produce a finite number of goods and services.

The curve of production possibilities shows all possible combinations of production of various goods, subject to the full and efficient use of available limited resources. It is a decreasing function.