What does a point inside vs. on the production possibilities frontier represent?

• A. A point on the PPF indicates allocative efficiency matching consumer preferences; a point inside indicates productive efficiency but not allocative efficiency.
• B. A point on the PPF is unattainable with current resources; a point inside represents the maximum possible output given resources.
• C. A point on the PPF indicates zero opportunity cost; a point inside indicates positive opportunity cost due to trade-offs.
• D. A point on the PPF shows productive efficiency (full use of resources); a point inside shows inefficiency or underutilized/unemployed resources.

Answer: (D)