What is the function of Production Possibility Frontier?

Efficient allocation of scarce resources

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Inefficient allocation of scarce resources

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Identifying the market equilibrium

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Showing the money supply in the economy

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Solution

The correct option is A Efficient allocation of scarce resources
Production possibility frontier is the graph which indicates the various production possibilities of two commodities when resources are fixed. The production of one commodity can only be increased by sacrificing the production of the other commodity. It is also called the production possibility curve or product transformation curve.

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