On a production possibilities frontier (PPF), efficient production is represented by which point(s)?

• A. Points outside the PPF curve
• B. Points inside the PPF curve
• C. Points located on the PPF curve
• D. All points on or inside the PPF curve

Answer: (C)

Verified step by step guidance

1. Understand that the Production Possibilities Frontier (PPF) represents the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
2. Recognize that points located on the PPF curve indicate efficient production because the economy is utilizing all its resources fully and efficiently.
3. Know that points inside the PPF curve represent inefficient production since some resources are underutilized or wasted.
4. Identify that points outside the PPF curve are unattainable with the current resources and technology, meaning the economy cannot produce those combinations at present.
5. Conclude that efficient production corresponds to points exactly on the PPF curve, where the economy is operating at its full productive capacity.