A point inside a production possibilities frontier
A) is more efficient than points on the production possibilities frontier.
B) could indicate that some resources are unemployed.
C) is unattainable.
D) implies that too much capital and not enough labor are being used.

Question

Quizplus · Accepted Answer

A point inside the production possibilities frontier indicates that the resources are not fully utilized or unemployed. Therefore, choice B is the correct answer. Choices A, C, and D are not true since a point inside the production possibilities frontier is less efficient, attainable, and implied excess labor or not enough capital, respectively.

A Point Inside a Production Possibilities Frontier