If it is possible to rearrange the use of resources in the economy and get more output, then the economy must have been:
-operating outside the production possibilities frontier 83
– operating on the production possibilities frontier
– operating inside the production possibilities frontier
– operating at a corner point on the production possibilities frontier
The above scenarios states the possibility to rearrange the useful resources in the economy itself and as a result get more output. The answer for the above scenario is C, which states “operating inside the production possibilities frontier”.
It is to be noted that whenever there is a room or a possibility to rearrange the resources of the economy to achieve more and more output, in such a case the resources of the economy are not utilized properly or in the best possible manner. In other words, the resources haven’t been used efficiently and effectively. It can be concluded, that in such a scenario the economy of the nation has been operating without make the best use of it’s resources, and the resources are going waste. This is a very drawback for the economy, as it shows that the economy has not attained the highest level of productivity, which all the more indicates that the economy has not performed with the best of its abilities by ignoring the full use of it’s potential resources. This is a sad state for the economy, and after realizing it the economy should take effective measures to get the situation on track.