Efficient production occurs when the economy is:
A)operating inside its production possibility frontier.
B)operating on its production possibility frontier.
C)operating outside its production possibility frontier.
D)moving beyond its production possibility frontier.

Question

Quizplus · Accepted Answer

Operating on its production possibility frontier means that the economy is using all of its resources in the most efficient way possible to produce goods and services. It represents the maximum output that an economy can produce with its given resources and technology. Operating inside the frontier means that the economy is not using all available resources efficiently and operating outside the frontier is not possible as it represents output levels that are not achievable with current resources and technology.

Efficient Production Occurs When the Economy Is