Consider an economy that is producing inside its production possibilities curve. This economy could move closer towards its production possibilities curve by:
A) Distributing incomes more equally
B) Employing more of its available resources
C) Increasing the levels of wages and prices
D) Acquiring additional resources

Question

Quizplus · Accepted Answer

When an economy is producing below its production possibilities curve, it means that there are available resources that are not being utilized effectively. Therefore, by employing more of its available resources, the economy can move closer towards its production possibilities curve and increase its output. However, the other options such as distributing incomes more equally, increasing wages and prices, and acquiring additional resources, may have potential benefits for the economy, but they may not necessarily lead to an increase in production.

Consider an Economy That Is Producing Inside Its Production Possibilities