Question

Any point inside the production possibilities curve indicates:

Answer 1

Answer:

(D) that resources are imperfectly substitutable among alternative uses.

Explanation:

A production possibility curve is used to measures the maximum amount of output of two goods using any combination of the factors of production as fixed input, therefore, capital,land,labour and entrepreneur, which requires the combination of all in most cases. The points on the curve indicates the amount of each goods to be produced when there is a shift in resources from making more of one goods than the other goods.

If the amount produced is inside the production possibility curve, then all of the factors of production are not being effectively used in the production of the goods.