In Figure 19-2 given below, points A, B, C, and D show the different allocations of goods between Ann and Bill.
points A,B,C,and D show the different allocations of goods between Ann and Bill.
In Figure 19-2,which of the following allocations of goods between Ann and Bill is inefficient?
A)A
B)B
C)C

Question

In Figure 19-2 given below, points A, B, C, and D show the different allocations of goods between Ann and Bill.
points A,B,C,and D show the different allocations of goods between Ann and Bill. 
In Figure 19-2,which of the following allocations of goods between Ann and Bill is inefficient?
A)A 
B)B 
C)C

Quizplus · Accepted Answer

Allocation C is inefficient because it is inside the production possibilities frontier (PPF). This means that there is a possible allocation that would make both Ann and Bill better off, without making the other worse off. In contrast, allocations A, B, and D are on the PPF, meaning that any movement toward one person's preference would require sacrificing some of the other person's preference. Although there may be disagreements about which of A, B, or D is the "best" allocation, they are all efficient because they utilize all available resources to produce goods.

In Figure 19-2 Given Below, Points A, B, C, and D