4.9k views
2 votes
Which point(s) on the PPF are efficient?

1 Answer

0 votes

Final answer:

All points on the PPF that lie on the curve represent efficient points of production, while points inside the curve represent inefficient points.

Step-by-step explanation:

Productive efficiency means that, given the available inputs and technology, it is impossible to produce more of one good without decreasing the quantity that is produced of another good. All choices on the PPF in Figure 2.4, including A, B, C, D, and F, display productive efficiency. As a firm moves from any one of these choices to any other, either healthcare increases and education decreases or vice versa. However, any choice inside the production possibilities frontier is productively inefficient and wasteful because it is possible to produce more of one good, the other good, or some combination of both goods.

User Mitpatoliya
by
7.8k points