Points C,D,E,and H on the above graph show:
A) an inefficient allocation of society's scarce resources.
B) a constant trade-off between food and clothing.
C) possible combinations of food and clothing.
D) unattainable combinations of food and clothing.

Question

Points C,D,E,and H on the above graph show:
A) an inefficient allocation of society's scarce resources. 
B) a constant trade-off between food and clothing. 
C) possible combinations of food and clothing. 
D) unattainable combinations of food and clothing.

Quizplus · Accepted Answer

Points C, D, E, and H represent possible combinations of food and clothing that can be produced with existing resources. Therefore, the best choice is to choose a point on the production possibilities frontier (PPF), such as point C, which represents an efficient allocation of resources and therefore the maximum possible production of both goods. Any point inside the PPF, such as point D or E, represents an inefficient allocation of resources, while any point outside the PPF, such as point H, is unattainable with existing resources.

Points C,D,E,and H on the Above Graph Show