Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that
A)the nation is producing beyond its capacity, so inflation will occur.
B)the nation is not using all available resources or is using inferior technology or both.
C)the nation is producing an efficient combination of goods.
D)there will be a large opportunity cost if the nation tries to increase production of any good.

Question

Quizplus · Accepted Answer

The nation is not fully utilizing its resources or is using outdated technology, which is why it's producing inside its production possibilities frontier. This indicates inefficiency, not that it's producing beyond its capacity or efficiently.

Suppose a Nation Is Currently Producing at a Point Inside