If an economy uses its resources inefficiently, this situation would be illustrated on a production possibilities diagram as
A) an inward shift of the production possibilities curve.
B) an outward shift of the production possibilities curve.
C) operating at a point outside the production possibilities curve.
D) operating at a point inside the production possibilities curve.

Question

Quizplus · Accepted Answer

Operating at a point inside the production possibilities curve indicates that resources are not being used efficiently, as the economy is not producing at its maximum potential output.

If an Economy Uses Its Resources Inefficiently, This Situation Would