Suppose a Nation Is Currently Producing at a Point Inside

question 187

Multiple Choice

Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that

• A)the nation is producing beyond its capacity, so inflation will occur.
• B)the nation is not using all available resources or is using inferior technology or both.
• C)the nation is producing an efficient combination of goods.
• D)there will be a large opportunity cost if the nation tries to increase production of any good.