When an economy produces a combination of goods that lies inside the production possibilities curve its resources are not being fully and efficiently used. Hence, option C is correct.
The production possibility frontier, a curve, displays on a graph the maximum amounts that may be produced of two goods if they are both made from the same scarce resource. A different name for the PPF is the production possibility curve.
Opportunity cost is the money wasted in the production of a commodity when resources are transferred from one to another. On a graph, the maximum amount that could be generated is depicted as a curve.
Thus, option C is correct.
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