A point lying inside (under) a production possibilities frontier indicates that
A)the economy is saving money.
B)there are no associated opportunity costs.
C)more output could be produced with existing resources.
D)technology limits production.

Question

Quizplus · Accepted Answer

If a point lies inside the production possibilities frontier, it indicates that the economy is not using all of its resources to produce. This means that there is potential to produce more output with existing resources, as the economy is not operating at its maximum capacity. Therefore, choice C is the correct answer. Choices A, B, and D are all incorrect as they do not accurately reflect the situation of a point inside the production possibilities frontier.

A Point Lying Inside (Under) a Production Possibilities Frontier Indicates