Final answer:
A nation using all resources efficiently to produce goods and services will be operating somewhere on its production possibilities frontier, indicating the limits of its productive capacity and efficient resource use. The correct option is E) somewhere on its production possibilities frontier.
Step-by-step explanation:
If all resources are used efficiently to produce goods and services, a nation will find itself producing somewhere on its production possibilities frontier (PPF). This is because the PPF represents all the combinations of two goods or services that can be produced within an economy when all of its resources are used efficiently.
Choices within the PPF indicate a situation where producing more of one product would mean producing less of another, demonstrating productive efficiency. It's not possible for an economy to produce outside of its PPF unless there is growth in resources or improvements in technology, which would shift the PPF outward, allowing more of all goods to be produced.
Producing inside the PPF indicates that not all resources are being used efficiently, and there's still potential to increase production without sacrificing another product.