Question

If an economy is operating inside its production possibilities frontier: A) it is producing efficiently. The economy cannot produce more of one good without simultaneously reducing the output of another good. B) is producing inefficiently. If production was arranged more efficiently the economy can produce more on one good without sacrificing any production of another good. C) it is producing at an unattainable point. You cannot be inside the Production Possibilities Frontier. D) then opportunity cost approaches infinity. No economy want that to happen

Answer 1

Ans: is producing inefficiently. If production was arranged more efficiently the economy can produce more on one good without sacrificing any production of another good.

Explanation:

A production possibilities frontier shows different combinations of two goods which can be produced with the existing or available resources. Any point on the production possibilities curve shows an efficient production point because at these points , resources are efficiently used. But the points inside the PPF show an inefficient production combinations due the under utilization of existing or available resources . Any point outside the production possibilities curve can never be obtained due to the resources constraint.

So If an economy is operating inside its production possibilities frontier then it is producing inefficiently. If production was arranged more efficiently the economy can produce more on one good without sacrificing any production of another good.