A Production Possibilities Curve Graphically Represents the Maximum Quantities of Two

question 153

Multiple Choice

A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,

• A) it lacks the resources necessary to produce at full employment.
• B) it is utilizing some resources inefficiently.
• C) it does not confront the problem of scarce goods relative to unlimited wants.
• D) it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.

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