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-(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.If the economy is producing 8 cars and 12 computers per period:
A)the economy has ongoing unemployment or inefficiency.
B)the notion of increasing opportunity cost is invalidated.
C)the economy is still efficient but has made a decision not to buy as much as it could.
D)something must be done to reduce the amount of employment.

Question

Use the following to answer question:

-(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.If the economy is producing 8 cars and 12 computers per period:
A)the economy has ongoing unemployment or inefficiency. 
B)the notion of increasing opportunity cost is invalidated. 
C)the economy is still efficient but has made a decision not to buy as much as it could. 
D)something must be done to reduce the amount of employment.

Quizplus · Accepted Answer

If the economy is producing 8 cars and 12 computers per period and this point lies inside the production possibility frontier (PPF), it indicates that not all resources are being used efficiently or there is unemployment. The PPF represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized; points inside the PPF indicate inefficiency or unemployment.

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