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A Production Possibilities Curve Graphically Represents the Maximum Quantities of Two

Question 166

Multiple Choice

A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,


A) it lacks the resources necessary to produce at full employment.
B) it is utilizing some resources inefficiently.
C) it does not confront the problem of scarce goods relative to unlimited wants.
D) it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.

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