Question

Where on a graph of a production possibilities curve would a point showing that an economy is using its resources efficiently be located?


On the production possibilities curve


a

Inside the production possibilities curve


b

Beyond the production possibilities curve


c

On the
-axis and below the production possibilities curve


d

On the
-axis and below the production possibilities curve

Answer 1

a — On the production possibilities curve.

Explanation: Points on the curve represent combinations of goods that fully use available resources efficiently. Points inside are inefficient (underused resources) and points beyond are unattainable with current resources/technology.