Given the following table showing combinations of milk and honey that an economy can produce, which point represents productive efficiency?| Combination | Milk (gallons) | Honey (pounds) ||-------------|----------------|----------------|| A | 10 | 0 || B | 8 | 2 || C | 5 | 5 || D | 0 | 8 |A point is productively efficient if the economy is producing on the Production Possibilities Frontier (PPF). Which of the following combinations is productively efficient?

• A. Combination C: 5 gallons of milk and 5 pounds of honey
• B. Combination E: 3 gallons of milk and 7 pounds of honey
• C. Combination G: 2 gallons of milk and 2 pounds of honey
• D. Combination F: 6 gallons of milk and 6 pounds of honey

Answer: (A)

Verified step by step guidance

1. Understand that productive efficiency occurs when an economy produces on its Production Possibilities Frontier (PPF), meaning it cannot produce more of one good without producing less of another.
2. Identify the given combinations of milk and honey that lie on the PPF by checking the provided table: A (10,0), B (8,2), C (5,5), and D (0,8). These points represent maximum possible outputs given resources.
3. Recognize that any combination not listed in the table (such as E, F, or G) likely lies inside the PPF, indicating underutilization of resources and thus not productively efficient.
4. Conclude that the point representing productive efficiency must be one of the combinations on the PPF, where the economy is fully utilizing its resources.
5. Select the combination from the table that balances production of both goods (milk and honey) without waste, which is combination C (5 gallons of milk and 5 pounds of honey), as it lies on the PPF and represents efficient production.