Production efficiency is achieved when
A)the production possibilities frontier shifts outward at an even pace.
B)there are no more tradeoffs.
C)all resources are equally productive in all activities.
D)resources are not equally productive in all activities.
E)we produce goods and services at the lowest possible cost.

Question

Quizplus · Accepted Answer

Production efficiency is achieved when we produce goods and services at the lowest possible cost, meaning that resources are allocated in the most efficient way possible to maximize output while minimizing costs. This requires that resources are allocated based on their comparative advantage in different activities, and that there are no idle resources or wasteful activities. Option A is incorrect because the PPC may shift outward unevenly, based on the changes in productivity or availability of resources. Option B is incorrect since tradeoffs are always present, even at peak production efficiency. Option C is incorrect because resources have different productivity levels in different activities.

Production Efficiency Is Achieved When