A situation in which resources are either unused or misallocated or both is represented in a production possibilities frontier diagram by
A)any point on either the horizontal or the vertical axis.
B)a point above or to the right of the production possibilities frontier.
C)a point outside the production possibilities frontier.
D)a point inside the production possibilities frontier.
E)a point on or inside the production possibilities frontier.

Question

Quizplus · Accepted Answer

A point inside the production possibilities frontier represents a situation in which resources are either unused or misallocated or both because it shows that the economy is producing at a level lower than its potential. The economy is not using all available resources efficiently, resulting in unused or misallocated resources.

A Situation in Which Resources Are Either Unused or Misallocated