Question

​We can show economic​ inefficiency: A. with points on the production possibilities frontier. B. with points inside and on the production possibilities frontier. C. with points inside the production possibilities frontier. D. with points on and outside the production possibilities frontier. E. with points outside the production possibilities frontier.

Answer 1

The correct answer is option C.

Step-by-step explanation:

The points on the production possibility curve show the efficient utilization of resources. The points below the curve show attainable but inefficient bundles. This is because the points below the curve imply that resources are not fully utilized and there are still some excessive resources left.

The points above the curve show those bundles that are unattainable. This is because these bundles need more resources to be achieved.