A point inside, or to the left of, a production possibilities curve indicates that:
A) some of the economy's resources are unemployed.
B) the economy is growing.
C) more of one good can be produced only by giving up some of the other good.
D) the economy is operating at full employment.

Question

Quizplus · Accepted Answer

A point inside or to the left of a production possibilities curve indicates underutilization of resources, meaning some of the economy's resources are unemployed. This is because the production possibilities curve represents the maximum output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

A Point Inside, or to the Left Of, a Production