Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1

-Consider a nation with an endowment of iron ore and petroleum. If the nation specializes in the production of aluminum and gasoline instead of steel we can say that it is operating:

Question

Following is the production possibilities schedule for an economy producing two goods, Good A and Good B.Table 2.1
 
-Consider a nation with an endowment of iron ore and petroleum. If the nation specializes in the production of aluminum and gasoline instead of steel we can say that it is operating:

Quizplus · Accepted Answer

The nation is operating inside its production possibilities curve because it has chosen to specialize in the production of goods (aluminum and gasoline) that are not represented in the schedule. The production possibilities curve represents the maximum combinations of two goods that can be produced when resources are used efficiently, and any point inside the curve represents an underutilization of resources.

Following Is the Production Possibilities Schedule for an Economy Producing