Question

3. Efficiency in the production possibilities model Suppose France produces only two goods: wheat and tablets. The following graph shows France's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F 100 エ PPF 40 20 100 WHEAT (Millions of bushels) Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply Point Inefficient Efficient Unattainable

Answer 1

Ans:

Production possibility frontier indicates the maximum output possibilities for two goods,when all resources are fully and efficiently utilized. Points on the curve are efficient output combinations, Points inside the curve are inefficient output combinations and points outside the curve are output combinations that are unattainable.

A	Inefficient
B	Unattainable
C	Unattainable
D	Efficient
E	Efficient
F	Inefficient