Option 1 is the correct answer. When an economy is on its production possibility frontier, it means that it is operating at its maximum potential and efficiently allocating its resources. This implies that the economy cannot increase the production of one commodity without sacrificing the production of another commodity. In other words, to produce more of one good, the economy has to give up some production of another good.

Option 2 is incorrect. When an economy is on its production possibility frontier, it means that it is operating at its maximum potential, and there are constraints and limits on its production of goods and services. It cannot produce an unlimited amount of goods and services.

Option 3 is incorrect. While an economy on its production possibility frontier can produce more than one commodity, producing more of one commodity would require sacrificing the production of another commodity.

Option 4 is not necessarily true. The shape of the production possibility frontier can vary depending on the specific circumstances of the economy. The production possibility frontier can be a straight line, a concave curve, or a convex curve, depending on the nature of the resources and technology available to the economy.