A point lying inside the production possibilities boundary is one at which
A)there is no scarcity.
B)the opportunity cost of producing more output is negative.
C)it is not possible to produce more output with existing resources.
D)the economy has run out of resources.
E)more output could be produced with existing resources.

Question

Quizplus · Accepted Answer

A point inside the production possibilities boundary indicates that the economy is not operating at its most efficient level and that more output could be produced with the existing resources without increasing the input. This situation reflects underutilization of resources rather than a lack of resources or the impossibility of increasing output.

A Point Lying Inside the Production Possibilities Boundary Is One