When an economy is operating efficiently, the production of one more unit of a good will result in some loss of production of another good because

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Efficiency implies that all available resources are already being used, and any additional production of one good must come at the expense of production of another good. This is illustrated by the production possibilities frontier (PPF), which shows the tradeoff between producing two goods given a fixed amount of resources. Any movement along the PPF involves giving up some production of one good to produce more of another good.

When an Economy Is Operating Efficiently, the Production of One