In the context of the Production Possibilities Frontier (PPF) and comparative advantage, what is the primary goal of mass customization?

• A. To eliminate trade between countries by producing all goods domestically
• B. To maximize the total output by specializing in only one product
• C. To minimize opportunity cost by producing standardized goods for all consumers
• D. To efficiently produce goods tailored to individual preferences while maintaining economies of scale

Answer: (D)

Verified step by step guidance

1. Understand the concept of the Production Possibilities Frontier (PPF), which illustrates the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
2. Recall the idea of comparative advantage, which suggests that countries or producers should specialize in producing goods for which they have a lower opportunity cost, thereby increasing overall efficiency and gains from trade.
3. Recognize that mass customization aims to combine the benefits of mass production (economies of scale) with the ability to tailor products to individual consumer preferences, rather than producing only standardized goods or specializing in a single product.
4. Analyze how mass customization fits within the PPF framework: it allows producers to efficiently allocate resources to produce a variety of customized goods without sacrificing the cost advantages of large-scale production.
5. Conclude that the primary goal of mass customization is to efficiently produce goods tailored to individual preferences while maintaining economies of scale, which aligns with maximizing productive efficiency and consumer satisfaction.