When an economy is producing inside its production possibility frontier
a. it is efficient so long as it is producing what people want.
b. it must overcompensate by producing outside the curve to achieve efficiency.
c. only technological advances will allow it to increase production.
d. production inefficiency occurs.
Production Possibility Frontier:
When firms make production activities, they use the production possibility frontier to understand the link between the input resources that they are using during the process and the output that is obtained from this process. All the points on the curve describe the efficient level of production.
Answer and Explanation: 1
The correct option is: d. production inefficiency occurs.
When an economy is operating or producing inside the PPF, it is the situation...
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fromChapter 1 / Lesson 5
Learn about the production possibilities frontier (PPF). See what the PPF graph represents and what causes the ppc curve to shift outward.