If a nation is operating at a point inside the production possibilities curve, it indicates that the nation could:
A) Increase its production of both goods X and Y simultaneously
B) Increase its production of one good, but only at the expense of reducing the other good
C) Not produce any more of one of the goods X or Y
D) Not employ any more resources because all resources are now employed

Question

Quizplus · Accepted Answer

When a nation is operating inside the production possibilities curve, it indicates that the nation is not using all of its available resources efficiently. This means that there is room for the nation to increase production of both goods X and Y without having to reduce the production of either good. Therefore, the correct choice is A.

If a Nation Is Operating at a Point Inside the Production