Use the following to answer question:
-(Figure: Wine and Wheat)Use Figure: Wine and Wheat.If this economy is producing at point A,we know the economy is:
A)using its resources efficiently.
B)using its resources inefficiently.
C)producing at an unattainable point.
D)trading with another country.

Question

Use the following to answer question: 
-(Figure: Wine and Wheat)Use Figure: Wine and Wheat.If this economy is producing at point A,we know the economy is:
A)using its resources efficiently. 
B)using its resources inefficiently. 
C)producing at an unattainable point. 
D)trading with another country.

Quizplus · Accepted Answer

Point A, located inside the production possibilities frontier (PPF), indicates that the economy is not utilizing all its resources efficiently, hence it is producing below its potential output. Efficient production points lie on the PPF curve.

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