Every point on the frontier of the production possibilities frontier represents:

Question

Quizplus · Accepted Answer

Every point on the frontier of the production possibilities frontier represents production efficiency, which means an economy is producing at the maximum possible output level given the available resources and technology. Points inside the frontier represent inefficient production levels, while points outside the frontier represent unattainable production levels. Allocative efficiency refers to producing the combination of goods and services that best satisfies society's preferences, which is not necessarily achieved on the frontier. X-efficiency refers to the level of efficiency achieved within a firm, rather than in the overall economy.

Every Point on the Frontier of the Production Possibilities Frontier