A point beneath the curve indicates inefficiency, and a point beyond the curve indicates impossibility. B) inefficiency in production. Since the production possibilities frontier represents all of the points where all resources are being used efficiently, it must be the case that this economy has to produce fewer guns if it wants to produce more butter, and vice versa. https://www.khanacademy.org/.../v/production-possibilities-curve In this diagram AF is the production possibility curve, also called or the production possibility frontier, which shows the various combinations of the two goods which … Points within the curve show when a country’s resources are not being fully utilised C) the law of increasing relative cost. The following diagram (21.2) illustrates the production possibilities set out in the above table. A point lying inside the production possibilities curve a. indicates that resources are not being fully or efficiently used. Production Possibilities. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. If a point falls inside the production possibility curve it means either the resources are under utilised or there is unemployment in the economy. Production possibility curve shows the different combinations of the production of two commodities that can be achieved in an economy given the resources and technology which are to be fully utilized. c. requires more resources than are presently available. D) the law of decreasing relative cost. Production points inside the curve show an economy is not producing at its comparative advantage. B) indicates unemployment. All choices along the curve shows production efficiency of both goods. Any point inside the production possibilities curve indicates:? d. represents an increase in resources. A) a lack of sufficient supply. b. illustrates resources being used to their fullest potential. 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