In what region of the production possibilities frontier can an economy produce?
A) An economy can produce only on the production possibilities frontier.
B) An economy can produce at any point inside or outside the production possibilities frontier.
C) An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier.
D) An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.

Question

Quizplus · Accepted Answer

An economy can produce at any point on or inside the production possibilities frontier, but cannot produce outside it. This is because points inside the curve represent inefficient use of resources, while points outside the curve are currently unattainable due to limited resources. Therefore, an economy can only produce efficiently on or inside the production possibilities frontier.

In What Region of the Production Possibilities Frontier Can an Economy