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Exhibit: Production Possibilities Curve-Military and Civilian Goods

-(Exhibit: Production Possibilities Curve-Military and Civilian Goods) If an economy is at point U, and its production possibilities curve is Curve 1, this would indicate that:
A) resources are fully employed.
B) economic growth has taken place.
C) there is inefficiency and/or unemployment.
D) the economy is maximizing its economic objectives.

Question

Use the following to answer question(s): 
Exhibit: Production Possibilities Curve-Military and Civilian Goods
 
-(Exhibit: Production Possibilities Curve-Military and Civilian Goods) If an economy is at point U, and its production possibilities curve is Curve 1, this would indicate that:
A) resources are fully employed. 
B) economic growth has taken place. 
C) there is inefficiency and/or unemployment. 
D) the economy is maximizing its economic objectives.

Quizplus · Accepted Answer

Point U, located inside the production possibilities curve (Curve 1), indicates that not all resources are being used efficiently. This could be due to unemployment or inefficiency in the economy, meaning that the economy could produce more of either or both goods without sacrificing anything.

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