Multiple Choice
Which of the following is false about optimized production technology (OPT) in the context of the Production Possibilities Frontier (PPF)?
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2. Introductory Economic Models
Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
On a production possibilities frontier (PPF), where would a point representing full employment and productive efficiency be located?
A
Outside the PPF curve
B
At the origin
C
On the PPF curve itself
D
Inside the PPF curve
Verified step by step guidance1
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.
Recognize that points on the PPF curve indicate full employment of resources and productive efficiency, meaning the economy is producing the maximum output possible without wasting resources.
Know that points inside the PPF curve represent underutilization of resources or inefficiency, where the economy could produce more of one or both goods without sacrificing anything.
Identify that points outside the PPF curve are unattainable with the current resources and technology, as they require more inputs than available.
Therefore, a point representing full employment and productive efficiency must lie exactly on the PPF curve itself.
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