Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow. Figure 2.2
-Refer to Figure 2.2. You correctly deduce that all resources are fully employed and there are no production inefficiencies if this economy is currently operating at a point
A) inside the production possibility frontier.
B) along the production possibility frontier.
C) outside the production possibility frontier.
D) either inside or along the production possibility frontier.

Question

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow.  Figure 2.2
-Refer to Figure 2.2. You correctly deduce that all resources are fully employed and there are no production inefficiencies if this economy is currently operating at a point
A) inside the production possibility frontier. 
B) along the production possibility frontier. 
C) outside the production possibility frontier. 
D) either inside or along the production possibility frontier.

Quizplus · Accepted Answer

An economy is considered to be using all its resources efficiently and is at full employment when it operates along the production possibility frontier (PPF). Points inside the PPF indicate underutilization of resources, while points outside are unattainable with current resources and technology.

Refer to the Information Provided in Figure 2