If an economy is producing a combination of goods that places it on the production possibilities curve, then it has:
A) economic growth.
B) full employment.
C) inefficiency.
D) idle factors of production.

Question

Quizplus · Accepted Answer

If an economy is producing a combination of goods that places it on the production possibilities curve, then it is utilizing all of its resources and factors of production to produce goods efficiently. This means that the economy is at full employment, with no idle factors of production. However, it does not necessarily indicate economic growth, as the production possibilities curve represents the maximum output that the economy can produce with its existing resources and technology. It also does not suggest inefficiency, as the economy is operating on its production possibilities frontier, the most efficient point at which it can produce goods.

If an Economy Is Producing a Combination of Goods That