Consider a production possibility frontier for Iraq. If in 2014 Iraq's resources are not being fully utilized, Iraq will be somewhere _____ of its production possibility frontier.
A)inside
B)outside
C)near the bottom
D)near the top

Question

Quizplus · Accepted Answer

If Iraq's resources are not being fully utilized, it means that its economy is not producing at its maximum potential. Therefore, it must be operating below its production possibility frontier (PPF), which represents the maximum output that Iraq can produce using its available resources and technology. The area inside the PPF represents all the combinations of goods and services that Iraq can produce when its resources are not fully utilized.

Consider a Production Possibility Frontier for Iraq