Suppose the production possibilities frontier (PPF) of an economy has been plotted on a graph. If the horizontal axis of the graph measures the output of capital goods and the vertical axis measures the output of consumer goods, then a point outside the PPF represents _____
A) a smaller quantity of consumer goods than that represented by a point inside the PPF.
B) an inefficient output combination of the two goods in the economy.
C) an unattainable output combination of the two goods in the economy.
D) an output combination of more consumer goods than capital goods.
E) a smaller quantity of capital goods than that represented by a point inside the PPF.
Correct Answer:
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