If an economy is represented by a point along its production possibilities curve,
A) it can produce more of one product even if it does not produce less of another product.
B) it can produce more of one product only if it produces less of another product.
C) it cannot produce more of one product unless it stops producing the other product entirely.
D) it cannot possibly produce more of one product, even if it produces less of another product.

Question

Quizplus · Accepted Answer

When an economy is operating on its production possibilities curve, it is utilizing all available resources efficiently. To produce more of one good, it must reallocate resources from the production of another good, leading to less production of the latter. This trade-off reflects the concept of opportunity cost.

If an Economy Is Represented by a Point Along Its