Which of the following describes when an economy may be operating at a point inside the production possibilities curve?

Question

Quizplus · Accepted Answer

If a substantial amount of machinery is idle, it indicates that the economy is not utilizing its resources efficiently and is operating at a point inside the production possibilities curve. Answer A is incorrect because if production resources are being used efficiently, the economy would be operating on the production possibilities curve. Answer C is not a sufficient criterion to determine whether an economy is operating at a point inside the production possibilities curve. Answer D is incorrect because technological progress generally shifts the production possibilities curve outward, allowing the economy to produce more output, but it does not necessarily mean that the economy is operating inside the production possibilities curve.

Which of the Following Describes When an Economy May Be