If a nation is operating at a point inside the production possibilities curve, it indicates that the nation could
A) increase its production of both goods X and Y simultaneously.
B) increase its production of one good, but only at the expense of reducing the other good.
C) not produce any more of one of the goods X or Y.
D) not employ any more resources, because all resources are now employed.

Question

Quizplus · Accepted Answer

Operating inside the production possibilities curve implies that the nation is not using all its resources efficiently and can produce more of both goods X and Y simultaneously without sacrificing the production of either good. This could be achieved by increasing productivity or improving technology.

If a Nation Is Operating at a Point Inside the Production