A point inside a production possibilities frontier
A) could indicate that resources are misallocated.
B) is more efficient than a point on the production possibilities frontier.
C) reflects the fact that more technology needs to be developed to fully employ all resources.
D) implies that too much labor and not enough capital is being used.

Question

Quizplus · Accepted Answer

A point inside the production possibilities frontier (PPF) indicates that not all resources are being used efficiently or to their full potential, which could be due to misallocation of resources among other reasons. Points on the PPF represent efficient production levels, while points inside suggest underutilization.

A Point Inside a Production Possibilities Frontier