A point inside the production possibilities frontier is

• A. Attainable, but inefficient
• B. Efficient, but unattainable
• C. Efficient and attainable
• D. Inefficient and unattainable

Answer: (A)

Verified step by step guidance

1. Understand the concept of the Production Possibilities Frontier (PPF): The PPF is a curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors. It illustrates the trade-offs between the two goods.
2. Identify the characteristics of points on the PPF: Points on the curve represent efficient production levels, where resources are fully utilized. Points inside the curve indicate that resources are not being used to their full potential, while points outside the curve are unattainable with current resources.
3. Analyze the position of a point inside the PPF: A point inside the PPF means that the economy is not using all its resources efficiently. This could be due to unemployment, underemployment, or inefficient use of resources.
4. Determine the attainability of the point: Since the point is inside the PPF, it is attainable because it is within the limits of current resources and technology.
5. Conclude the efficiency of the point: The point is inefficient because it does not utilize all available resources to their full potential, leading to less than maximum possible output.