Suppose a nation is currently producing at a point inside its production possibilities frontier....
Question:
Suppose a nation is currently producing at a point inside its production possibilities frontier. We know that:
a. the nation is producing an efficient combination of goods
b. there will be a large opportunity cost if the nation tries to increase production of any good
c. the nation is producing beyond its capacity, so inflation will occur
d. the nation is not using all available resources or is using inferior technology or both
Production Possibilities Frontier:
A production possibilities frontier is the maximum combination of two good or services that can be produced when a nation is operating efficiently, which means all resources are being used to their fullest ability.
Answer and Explanation: 1
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View this answerSuppose a nation is currently producing at a point inside its production possibilities frontier. We know that (d) the nation is not using all...
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Applying the Production Possibilities Model
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Chapter 1 / Lesson 4The production possibility model illustrates scarcity and efficiency. Explore how opportunity costs affect the production possibility curve and discover why it is bowed outward on a graph.
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