cannot have everything it might want, either. This section of the chapter will explain the constraints society

faces, using a model called the production possibilities frontier (PPF). There are more similarities than

differences between individual choice and social choice. As you read this section, focus on the similarities.

Because society has limited resources (e.g., labor, land, capital, raw materials) at any point in time, there is a

limit to the quantities of goods and services it can produce. Suppose a society desires two products, healthcare

and education. The production possibilities frontier in Figure 2.3 illustrates this situation.

FIGURE 2.3 A Healthcare vs. Education Production Possibilities Frontier This production possibilities frontier

shows a tradeoff between devoting social resources to healthcare and devoting them to education. At A all

resources go to healthcare and at B, most go to healthcare. At D most resources go to education, and at F, all go to
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