Suppose the economy goes from a point on its production possibilities frontier (PPF)to a point below that PPF.Assuming that the PPF has not shifted,this could be due to
A) a gain of resources.
B) a loss of resources.
C) technological improvement in the production of both goods.
D) an increase in unemployment of some resources.

Question

Quizplus · Accepted Answer

Moving from a point on the production possibilities frontier (PPF) to a point below it, without the PPF itself shifting, indicates that the economy is not utilizing all its resources efficiently. This could be due to an increase in unemployment or underemployment of resources, rather than a change in the amount of resources (loss or gain) or an improvement in technology.

Suppose the Economy Goes from a Point on Its Production