Question

If a certain combination of goods and services lies inside the production possibilities curve for an economy, which of these statements must be true? A) That combination is an inefficient use of resources. B) Resources are being used more efficiently now than in the past. C) This economy must be realizing gains from specialization and trade. D) More resources must be obtained to attain that combination of goods and services.

Answer 1

That combination is an inefficient use of resources.

Answer 2

Answer:

A) That combination is an inefficient use of resources.

Explanation:

In economics, the frontier of production possibilities, also called the production possibility curve, graphically illustrates the scarcity of factors of production and creates a limit to the productive capacity of a company, country, or society. Following this reasoning, if a certain combination of goods and services is within the production possibilities curve of an economy, it means that resources are being used more efficiently.