Think of the production possibilities frontier (PPF)model.When society is producing the largest possible output from its resources,it is operating
A) inefficiently.
B) efficiently.
C) with no opportunity cost.
D) inside (within)the PPF.
E) beyond its opportunity cost.

Question

Quizplus · Accepted Answer

The PPF model shows the maximum amount of two goods that can be produced with the given resources and technology. When society is producing at a point on the PPF, it is using all of its resources efficiently to produce the maximum amount of goods possible. Therefore, the correct answer is B) efficiently. A) inefficiently and D) inside the PPF are incorrect because they indicate that society is not producing at its maximum capacity. C) with no opportunity cost and E) beyond its opportunity cost are also incorrect because they do not relate to the concept of production efficiency captured by the PPF model.

Think of the Production Possibilities Frontier (PPF)model