In a production possibilities frontier, a point ________ the frontier is productively inefficient.
A)along
B)inside
C)outside
D)at either intercept of

Question

Quizplus · Accepted Answer

A point inside the frontier indicates that resources are not being used to their full potential, resulting in reduced output levels compared to what is possible at a given level of resources. This means the economy is producing less than the optimal level and is therefore said to be productively inefficient. Points along the frontier and outside the frontier are efficient and unattainable, respectively. The intercepts of the frontier represent maximum production of a single good at the expense of the other good.

In a Production Possibilities Frontier, a Point ________ the Frontier