If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that
A) it is impossible to produce more consumer goods.
B) resources cannot be reallocated between the two goods.
C) it is impossible to produce more capital goods.
D) more consumer goods can only be produced at the cost of fewer capital goods.

Question

Quizplus · Accepted Answer

Operating on the production possibilities curve means the economy is using all its resources efficiently. To produce more of one good, it must reduce the production of the other, illustrating opportunity cost.

If an Economy Is Operating on Its Production Possibilities Curve