If an economy is operating on its production possibilities curve, it is:
A) efficient and fully employed.
B) fully employed but not necessarily efficient.
C) efficiently producing but not necessarily fully employed.
D) inevitably going to grow in the future.

Question

Quizplus · Accepted Answer

An economy operating on its production possibilities curve is producing goods and services at the maximum possible level given its resources and technology. This means that it is efficient, as all resources are being utilized in the best possible way, and fully employed, as all available labor is being used. Therefore, the correct answer is A, efficient and fully employed.

If an Economy Is Operating on Its Production Possibilities Curve