If a Country Is Currently Producing Inside Its Production Possibilities

question 81

Multiple Choice

If a country is currently producing inside its production possibilities curve

• A) it can increase the production of both goods by putting unemployed resources to work.
• B) it can increase the production of one of the goods only if it reduces the production of the other good.
• C) it is experiencing efficient production of one good but not the other.
• D) None of the above are correct.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two products that may be produced with available resources and technology.

Good X

Often refers to a specific product or commodity being analyzed or discussed in economic models.

Good Y

A generic term used in economic models to represent a particular product or service in the market.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set amount of inputs, highlighting concepts of opportunity cost, efficiency, and trade-offs.