Which of the following activities at a manufacturing facility is an example of productive efficiency on the production possibilities frontier (PPF)?

• A. Leaving some machines idle while others are overused
• B. Allocating resources to produce only one type of good regardless of demand
• C. Producing fewer goods than the facility's capacity allows
• D. Producing goods using all available resources without any waste

Answer: (D)

Verified step by step guidance

1. Understand the concept of productive efficiency: it occurs when a firm or economy produces the maximum possible output from its available resources, meaning no resources are wasted.
2. Recall that the Production Possibilities Frontier (PPF) represents all combinations of two goods that can be produced efficiently using all available resources.
3. Analyze each activity in terms of resource utilization: productive efficiency requires using all resources fully, so leaving machines idle or producing less than capacity indicates inefficiency.
4. Recognize that producing only one type of good regardless of demand does not necessarily imply productive efficiency, as resources might not be allocated optimally to maximize output.
5. Conclude that the activity which exemplifies productive efficiency on the PPF is producing goods using all available resources without any waste, as this aligns with the definition of being on the PPF.