Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point below that PPF.Assuming that the PPF has not shifted,this could be due to
A) a gain of resources.
B) a loss of resources.
C) technological improvement in the production of both goods.
D) a new law that interferes with productive efficiency.

Question

Quizplus · Accepted Answer

Moving from a point on the production possibilities frontier (PPF) to a point below it, without the PPF itself shifting, suggests that the economy is not utilizing its resources as efficiently as before. This could be due to various factors that disrupt efficient production, such as new laws or regulations that interfere with the productivity of businesses or workers. Choices A, B, and C would typically cause the PPF itself to shift, rather than moving the economy's position relative to an unchanged PPF.

Suppose the Economy Goes from a Point on Its Production