Refer to the above diagram. If the production possibilities of an economy are shown by curve AB but the economy is operating at point 4, the reasons are most likely to be because of:

Question

Quizplus · Accepted Answer

If the economy is operating at point 4, it means that it is not using all its resources efficiently to produce at the maximum point on the production possibilities curve. This could be due to factors such as low demand for goods and services produced, or inefficiencies in the allocation of resources.

Refer to the Above Diagram