Which points on a production possibilities frontier (PPF) graph demonstrate productive efficiency?

• A. Points located on the PPF curve itself
• B. Points located outside (above) the PPF curve
• C. Any point regardless of its position relative to the PPF
• D. Points located inside (below) the PPF curve

Answer: (A)

Verified step by step guidance

1. Understand that a Production Possibilities Frontier (PPF) represents the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
2. Recall that productive efficiency occurs when an economy is producing the maximum output possible from its resources, meaning no resources are wasted.
3. Identify that points located on the PPF curve itself represent combinations where resources are fully and efficiently utilized, so these points demonstrate productive efficiency.
4. Recognize that points inside (below) the PPF curve indicate underutilization of resources, meaning the economy is not productively efficient at these points.
5. Note that points outside (above) the PPF curve are unattainable with current resources and technology, so they do not represent productive efficiency.