When an economy is operating on its production possibilities curve,it is always
A) both productively efficient and allocatively efficient.
B) productively efficient but may not be allocatively efficient.
C) allocatively efficient but may not be productively efficient.
D) experiencing growth.
E) increasing its standard of living.

Question

Quizplus · Accepted Answer

When an economy is on its production possibilities curve, it is using all resources efficiently, meaning it is productively efficient. However, it may not be allocatively efficient if the mix of goods being produced does not match consumer preferences.

When an Economy Is Operating on Its Production Possibilities Curve,it