If an economy is operating at a point inside the production possibilities frontier, then
A) society's resources are being inefficiently utilized.
B) the PPF curve will shift inward.
C) society's resources are being used to produce too many consumer goods.
D) economic policy must retard further growth of the economy.

Question

Quizplus · Accepted Answer

When an economy is operating inside the production possibilities frontier (PPF), it means that not all resources are being used efficiently or to their full potential. The PPF represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized. Operating inside the PPF suggests underutilization of resources, hence inefficiency.

If an Economy Is Operating at a Point Inside the Production