Question on: JAMB Economics - 1994

If the economy of the country is operating at X, the implication is that

the productive capacity is being fully utilized

the productive capacity is not being fully utilized

too little of consumer goods is being produced

there is a disequilibrium between the production of capital and consumer goods

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Correct Option: B

The image depicts a point (X) inside the Production Possibility Frontier (PPF).

Inside the PPF: This means the economy is not operating at its full potential. Resources are not being fully utilized. There is either unemployment of resources (labor, capital, etc.) or inefficiency in production.
On the PPF: Represents efficient production, where all resources are fully employed.
Outside the PPF: Is currently unattainable given the economy's resources and technology.

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