A production possibilities frontier is shown below (Z, "Home Goods," on the vertical axis; H, "Health," on the horizontal axis). Suppose that the individual is producing the combination associated with point B, but they prefer to be at point C. Given this information we might say that this combination is ____. A. productively efficient but allocatively inefficient. B. productively efficient and allocatively efficient. C. productively inefficient and allocatively inefficient. D. productively inefficient, but allocatively efficient.
A production possibilities frontier is shown below (Z, "Home Goods," on the vertical axis; H, "Health," on the horizontal axis). Suppose that the individual is producing the combination associated with point B, but they prefer to be at point C. Given this information we might say that this combination is ____. A. productively efficient but allocatively inefficient. B. productively efficient and allocatively efficient. C. productively inefficient and allocatively inefficient. D. productively inefficient, but allocatively efficient.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A production possibilities frontier is shown below (Z, "Home Goods," on the vertical axis; H, "Health," on the horizontal axis). Suppose that the individual is producing the combination associated with point B, but they prefer to be at point C. Given this information we might say that this combination is ____.
A. productively efficient but allocatively inefficient.
B. productively efficient and allocatively efficient.
C. productively inefficient and allocatively inefficient.
D. productively inefficient, but allocatively efficient.
Transcribed Image Text:B
A
2.
Expert Solution
Step 1
All the points that lie on a PPF have productive efficiency. A PPF shows combinations of goods that can be produced using the available resources and technology in the economy. This shows a situation where no more of the other good can be produced without reducing the production of the one good. Both points B and C have productive efficiency.
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