A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are efficiently utilized. An economy that operates inside this production possibilities curve
A) is using its resources inefficiently.
B) lacks the necessary technology to produce efficiently.
C) lacks the resources to produce goods efficiently.
D) is utilizing its available resources as efficiently as possible.

Question

Quizplus · Accepted Answer

An economy operating inside the production possibilities curve indicates that it is not using all its resources efficiently, as it could produce more of one or both goods without sacrificing the production of the other.

A Production Possibilities Curve Graphically Represents the Maximum Quantities of Two