If an economy is operating inside its production possibilities curve for tanks and bread:
A)scarcity does not exist.
B)all resources are being used efficiently.
C)production of bread can only increase by sacrificing the production of tanks.
D)production of bread and tanks can both increase.

Question

If an economy is operating inside its production possibilities curve for tanks and bread:
A)​scarcity does not exist.
B)​all resources are being used efficiently.
C)​production of bread can only increase by sacrificing the production of tanks.
D)​production of bread and tanks can both increase.

Quizplus · Accepted Answer

When an economy is producing inside its production possibilities curve, it means that there are unused or underutilized resources. Therefore, both the production of tanks and bread can increase simultaneously without sacrificing one for the other. This situation usually occurs when there is not enough demand for the goods or services produced or when there is a shortage of factors of production.

If an Economy Is Operating Inside Its Production Possibilities Curve