Asked by
Brianna Perkins
on Dec 11, 2024
Verified
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.
Production Possibilities Curve
A graphical representation showing the maximum number of goods or services that can be produced in an economy given available resources and technology.
Scarce Goods
Items that are limited in availability compared to the desires of people to possess them, requiring mechanisms like pricing or rationing to distribute them.
Unlimited Wants
The economic concept that humans have infinite desires or wishes for goods and services, despite having limited resources.
- Understand the manifestation of economic inefficiencies on the production possibilities frontier.
Verified Answer
BL
Learning Objectives
- Understand the manifestation of economic inefficiencies on the production possibilities frontier.