An economy that is producing on the production possibility frontier at some point other than the output of efficient allocation is
A) efficient, as it is on the production possibility frontier.
B) inefficient, as the combination of goods and services produced is not what people want.
C) efficient, as the economy is producing goods at the lowest possible cost.
D) inefficient, as that combination of goods could be produced at a lower cost if more efficient technology were employed.

Question

Quizplus · Accepted Answer

Being on the production possibility frontier (PPF) indicates that an economy is using all its resources efficiently, but if the mix of goods and services produced does not match what people want, then the allocation is not efficient in terms of satisfying consumer preferences.

An Economy That Is Producing on the Production Possibility Frontier