Question

What do you mean by the production possibilities of an economy?

Answer 1

Answer:

Explanation:

Production possibility of a country to produce goods and services in the limited resources and technology

Answer 2

Answer:

The ability of a country to produces goods and services with the limited resources and technology is known as production possibilities of the economy.

Explanation:

There are always two goods involved here thus when a country decides to use all of its resources in one good then there will be no more resources to produce the other good. However, this theory is not absolute because as the country decides to produce the other good it would give up some of its resources until there are no more resources for the other good. It is therefore possible to increase production of both goods at the same time as long as resources allow it.