Sam's production possibilities frontier has good A on the horizontal axis and good B on the vertical axis. If Sam is producing at a point inside his frontier, then he
A) can increase production of both goods with no increase in resources.
B) is fully using all his resources.
C) values good A more than good B.
D) values good B more than good A.

Question

Quizplus · Accepted Answer

Producing inside the production possibilities frontier indicates that not all resources are being fully utilized. Therefore, Sam can increase production of both goods without needing more resources.

Sam's Production Possibilities Frontier Has Good a on the Horizontal