Our economy is generally operating _________ the production possibilities curve.
A)inside
B)outside
C)on

Question

Quizplus · Accepted Answer

The production possibilities curve represents the maximum output that an economy can produce given its resources and technology. Any point inside the curve represents an inefficient use of resources and any point outside the curve represents an unattainable level of output. Since our economy is generally operating at a level below its maximum potential, it is operating inside the production possibilities curve. Therefore, the best choice is A) inside.

Our Economy Is Generally Operating _________ the Production Possibilities Curve