Final answer:
The goods that lie on the production possibilities curve represent an efficient allocation, which includes both productive and allocative efficiency, whereby society's desired mix of goods and services is produced.
Step-by-step explanation:
The combination of goods that lie on the production possibilities curve (PPC) best describes an efficient allocation. The points along the PPC, such as B, C, and D, signify that productive efficiency has been achieved, which means it is impossible to produce more of one good without decreasing the quantity produced of another good. However, among these productively efficient choices, only one can be considered allocative efficiency. Allocative efficiency represents the mix of goods and services that society most desires, meaning that producers are supplying the quantity of each product that consumers demand.
Allocative efficiency means that the particular combination of goods and services on the production possibility curve that a society produces represents the combination that society most desires. It means that producers supply the quantity of each product that consumers demand. Only one of the productively efficient choices will be the allocatively efficient choice for society as a whole.