Efficient production exists when the economy is:
A) operating inside its production possibilities curve.
B) operating on its production possibilities curve.
C) operating outside its production possibilities curve.
D) moving beyond its production possibilities curve.

Question

Quizplus · Accepted Answer

Efficient production occurs when an economy is operating on its production possibilities curve. This means that it is producing the maximum possible output given its available resources and technology. Operating inside the curve indicates that the economy is not utilizing all of its available resources, while operating outside the curve suggests that it is producing beyond what is currently possible with its resources and technology. Moving beyond the curve is not possible as it represents the maximum attainable level of production.

Efficient Production Exists When the Economy Is