All points on a country's production possibilities boundary are

Question

Quizplus · Accepted Answer

All points on a production possibilities boundary represent the maximum output of a combination of two goods that can be produced with the given resources and technology. Therefore, all points are productively efficient, meaning that no more of one good can be produced without giving up some of the other good. However, allocative efficiency, which requires producing the combination of goods that satisfies consumer preferences, may not be achieved at all points on the production possibilities boundary. Pareto optimality and the equation P = MC do not apply to all points on the production possibilities boundary.

All Points on a Country's Production Possibilities Boundary Are