If Sam is producing at a point inside his production possibilities frontier, then he
A)must be doing the best he can with limited resources.
B)has a high opportunity cost of moving from this point.
C)is fully using all his resources and allocating his resources to their best use.
D)can increase production of both goods with zero opportunity cost.
E)is unaffected by costs and technology.

Question

Quizplus · Accepted Answer

Producing inside the production possibilities frontier indicates that not all resources are being fully utilized. Therefore, Sam can increase production of both goods without incurring any opportunity costs, as he moves towards the frontier where resources are efficiently used.

If Sam Is Producing at a Point Inside His Production