The economy moves from point A, where it produces 100 units of X and 200 units of Y, to point B, where it produces 200 units of X and 150 units of Y. It follows that
A)point A must be a productive efficient point.
B)point A must be a productive inefficient point.
C)point A may be a productive efficient point.
D)point B must be a productive efficient point.

Question

Quizplus · Accepted Answer

We cannot determine if point A is productive efficient based on the information given. Point B is not necessarily a productive efficient point either. We would need to know the production possibilities frontier or the opportunity cost of producing X and Y at each point to determine if they are productive efficient.

The Economy Moves from Point A, Where It Produces 100