An inefficient allocation of resources or unusually high unemployment:
A)causes the production possibilities curve to shift inward.
B)causes the production possibilities curve to shift outward.
C)can each be illustrated by a point inside the production possibilities curve.
D)can each be illustrated by a point outside the production possibilities curve.

Question

An inefficient allocation of resources or unusually high unemployment:
A)​causes the production possibilities curve to shift inward.
B)​causes the production possibilities curve to shift outward.
C)​can each be illustrated by a point inside the production possibilities curve.
D)​can each be illustrated by a point outside the production possibilities curve.

Quizplus · Accepted Answer

An inefficient allocation of resources or unusually high unemployment would indicate that the economy is not operating at its maximum efficiency, which means it is operating inside the production possibilities curve. This is illustrated by a point inside the curve. Therefore option C is correct.

An Inefficient Allocation of Resources or Unusually High Unemployment