Point inside the production possibility curve represents _________.

economically efficient combination of good x and good y

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full utilization of resources

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under-utilization of resources

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none of the above

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Solution

The correct option is C under-utilization of resources
Production possibility curve shows the different combinations of the production of two commodities that can be achieved if efficient production takes places in an economy given the resources and technology. So if an economy operates inside the PPF, then it indicates that the firm is not utilizing the supplied resources and technology efficiently.

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Similar questions

Name the situation reflected by an economy which produces a combination of goods that lie below its production possibility curve.

If the economy is producing a combination of goods inside its production possibilities frontier, then

= \frac{A c t u a l e l e c t r i c i t y p r o d u c t i o n}{M a x i m u m p o s s i b l e e l e c t r i c i t y p r o d u c t i o n} * 100

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