At which point is society producing the most output possible with the available resources and technology? (See Figure 1.1.)

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Point B represents the economy producing the most output possible with the available resources and technology. This point is also known as the production possibility frontier, where resources are allocated efficiently and there is no waste. Points A, C, and D all represent scenarios where resources are not being used efficiently, resulting in lower output levels.

At Which Point Is Society Producing the Most Output Possible