Given a production possibilities table for cell phones and computers, which point on the Production Possibilities Frontier (PPF) represents productive efficiency?

• A. A point on the PPF where all resources are fully utilized to produce the maximum possible output of both goods.
• B. A point outside the PPF that is currently unattainable with existing resources.
• C. A point inside the PPF where some resources are underutilized.
• D. A point where only one good is produced and the other is not produced at all.

Answer: (A)

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 on the PPF curve indicate productive efficiency, meaning all resources are fully utilized without any waste.
3. Identify that points inside the PPF represent inefficiency because some resources are underutilized or wasted.
4. Know that points outside the PPF are unattainable with the current resources and technology.
5. Conclude that a point on the PPF where both goods are produced at maximum efficiency (no resources wasted) represents productive efficiency.