Refer to the above graph.If the production possibilities curve for an economy is at CD but the economy is operating at point X, the reasons are most likely to be:
A)technological progress and industrial change.
B)increases in the quantity and the quality of resources.
C)improvement in labour productivity and the number of worker-hours.
D)lack of full employment and inefficient allocation of resources.

Question

Refer to the above graph.If the production possibilities curve for an economy is at CD but the economy is operating at point X, the reasons are most likely to be:
A)technological progress and industrial change. 
B)increases in the quantity and the quality of resources. 
C)improvement in labour productivity and the number of worker-hours. 
D)lack of full employment and inefficient allocation of resources.

Quizplus · Accepted Answer

If the economy is operating at point X, which is inside the production possibilities curve at CD, it means that the economy is not utilizing all its resources (labor, capital, and natural resources) to its full potential. This indicates that there is a lack of full employment and inefficient allocation of resources, which are the reasons for the economy's underutilization of its resources.

Refer to the Above Graph