Which of the following statements is true about the production of goods according to the Production Possibilities Frontier (PPF)?

• A. Points inside the PPF represent unattainable levels of production.
• B. Productive efficiency occurs only at the midpoint of the PPF.
• C. Any point on the PPF represents productive efficiency.
• D. Points outside the PPF are always achievable with current resources.

Answer: (C)

Verified step by step guidance

1. Understand the concept of the Production Possibilities Frontier (PPF): it represents the maximum possible combinations of two goods that an economy can produce given its resources and technology.
2. Analyze what points inside the PPF mean: these points represent production levels where resources are not fully utilized, so production is inefficient but attainable.
3. Consider points on the PPF: these represent combinations where resources are fully and efficiently used, meaning productive efficiency is achieved.
4. Evaluate points outside the PPF: these represent production levels that are currently unattainable with existing resources and technology.
5. Conclude that the true statement is that any point on the PPF represents productive efficiency, as it shows maximum output without wasting resources.