What is indicated by a point outside the production possibilities curve?

A point outside the production possibilities curve (PPC) indicates an unattainable level of production with the current resources and technology available in the economy. The PPC illustrates the maximum combinations of two goods that can be produced given a set amount of resources and technology; therefore, any point outside the curve represents a scenario that cannot be achieved without an increase in resources, technological advancement, or improved efficiency. Such points are not feasible under the current constraints, highlighting the limits of production capacity.

In contrast, points along the curve reflect efficient production levels, where resources are fully utilized, while points inside the curve indicate underutilization of resources, where the economy could produce more without any additional inputs. Lastly, the term "optimal combination" usually implies a point that maximizes utility or satisfaction based on preferences, which is not necessarily indicated by being outside the PPC. Hence, the indication of an unattainable level of production aligns directly with the concept of the production possibilities curve.