When an economy is not using all of its resources,it is producing at a point below its production possibilities frontier.

Question

Quizplus · Accepted Answer

The concept of production possibilities frontier (PPF) illustrates the maximum combination of goods and services an economy can produce given its resources and technology. If an economy is not using all of its resources, it can shift towards a point on the PPF, which represents maximum production capacity. Therefore, producing at a point below the PPF means that the economy is not using all of its resources and is not reaching its full potential.

When an Economy Is Not Using All of Its Resources,it