If an economy is not on its PPF, then it is not utilizing its resources as efficiently as it might be.

Question

Quizplus · Accepted Answer

The PPF (Production Possibility Frontier) represents the maximum output that can be produced with the given resources and technology. Any point on the PPF represents efficient utilization of resources. Therefore, if an economy is not on its PPF, it means that it is either producing fewer goods or producing them inefficiently with available resources. Hence, the answer is true that an economy is not utilizing its resources as efficiently as it might be if it is not on its PPF.

If an Economy Is Not on Its PPF, Then It