If an Economy Operates at a Point Within Its Production

question 58

Multiple Choice

If an economy operates at a point within its production possibilities curve,

• A) it lacks the resources necessary to reach the curve.
• B) it is utilizing all of its resources efficiently.
• C) it does not confront the problem of scarce goods relative to unlimited wants.
• D) it is not efficiently using all of its resources.

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Definitions:

Raw Materials

The basic materials and components required in the manufacturing process to produce finished goods.

Production

The process of creating goods and services using labor, machinery, and raw materials.

Finished Goods

Items that have finished being manufactured and are prepared for purchase by consumers.

Inventory

The raw materials, work-in-progress, and finished goods that a company holds for the purpose of sale in the future.