ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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If an economy is producing at a point inside its production possibility curve, then
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consumption is greater than production.
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productive resources are not used to their full potential.
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production of capital goods is inadequate.
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it cannot benefit by specialisation and trade.
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Explanation:
Detailed explanation-1: -If the economy is producing less than the quantities indicated by the curve, this signifies that resources are not being used to their full potential. In this case, it is possible to increase the production of some goods without cutting production in other areas.
Detailed explanation-2: -An economy that is operating inside its production possibilities curve could, by moving onto it, produce more of all the goods and services that people value, such as food, housing, education, medical care, and music. Increasing the availability of these goods would improve the standard of living.
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