If an economy is operating at a point inside the production possibilities frontier, then
A) economic policy must retard further growth of the economy.
B) society's resources are being used to produce too many consumer goods.
C) the PPF curve will shift inward.
D) society's resources are being inefficiently utilized.

Question

Quizplus · Accepted Answer

If the economy is operating inside the production possibilities frontier, it means that the available resources are not being fully utilized or allocated efficiently. This suggests that there is room for improvement in the allocation of resources, and the economy could produce more goods and services without adding any additional resources. Therefore, the best choice is D, society's resources are being inefficiently utilized.

If an Economy Is Operating at a Point Inside the Production