Even though points inside a production possibilities curve are attainable, why are they not preferred?
What will be an ideal response?
Points that lie inside a production possibilities curve indicate that an economy's resources have not been utilized efficiently and that some resources are lying idle. Therefore, these combinations of the goods are inefficient and are not preferred.
You might also like to view...
In the above figure, a perfectly competitive market will have a price of ________, and a single-price monopoly will have a price of ________
A) P1 and quantity of Q1; P2 and quantity of Q2 B) P2 and quantity of Q2; P1 and quantity of Q1 C) P3 and quantity of Q3; P1 and quantity of Q1 D) P2 and quantity of Q2; P3 and quantity of Q1 E) P2 and quantity of Q1; P1 and quantity of Q1
An increase in a monopoly's fixed costs would cause its output to
a. rise. b. fall. c. stay the same. d. impossible to predict.