Production Possibilities Frontier 28 24 point A point E point B 20 point C 16 point D point F 12 8. 12 16 20 24 pizza beer

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Identify the point or points for which the following is true: The economy is producing efficiently.

Production Possibilities Frontier
28
24
point A
point E
point B
point C
16
12
point D
point F
8
4
12
16
20
24
pizza
00
20
beer
Transcribed Image Text:Production Possibilities Frontier 28 24 point A point E point B point C 16 12 point D point F 8 4 12 16 20 24 pizza 00 20 beer
Expert Solution
Step 1

The production possibility curve shows the combination of goods produced in a country using all the available resources efficiently. Its slope calculates the amount of 1 good a company is ready to give up in order to produce one extra unit of another good.

If the goods are produced at the Production possibility curve then the resources are utilized efficiently. If the allocation is below the Production possibility the resources are not utilized to their full potential hence inefficient. If the allocation is beyond the production possibility curve then it is unattainable as the nation doesn't have enough resources to reach that point hence it is unattainable.

 

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