Refer to Figure 3-2. A change from point A to point B on a production possibilities frontier (PPF) represents a(n):

• A. movement from one efficient production point to another efficient production point
• B. shift of the PPF outward due to economic growth
• C. movement from an efficient point on the PPF to an unattainable point outside the PPF
• D. movement from an inefficient point inside the PPF to an efficient point on the PPF

Answer: (A)

Verified step by step guidance

1. Understand what a Production Possibilities Frontier (PPF) represents: it shows the maximum possible output combinations of two goods that an economy can produce using all available resources efficiently.
2. Identify the nature of points A and B on the PPF: since both points lie on the frontier, they represent efficient production points where resources are fully utilized.
3. Recognize that moving from point A to point B along the PPF means reallocating resources to produce more of one good and less of the other without increasing total resources or technology.
4. Distinguish this movement from a shift of the PPF, which would mean the entire curve moves outward or inward due to changes in resources or technology, not just a movement along the curve.
5. Conclude that the change from point A to point B is a movement from one efficient production point to another efficient production point on the PPF.