Asked by Elizabeth Carney on May 10, 2024

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What is TRUE about every point along a production possibilities frontier?

A) Both people are maximizing utility.
B) It is impossible to increase production of either good.
C) All allocations are efficient.
D) It includes some unattainable points.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs.

Utility

In economics, it represents a measure of satisfaction or happiness that consumers derive from the consumption of goods and services.

Efficient

The optimal allocation of resources to maximize the production of goods and services without wasting those resources.

  • Comprehend the notion of the production possibilities frontier and its significance for production efficiency and the concept of opportunity cost.
  • Evaluate the significance of points on, inside, and outside the utility possibilities boundary in the context of efficiency, equity, and realizability.
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JC
Jackson ChongMay 14, 2024
Final Answer :
C
Explanation :
Every point along the production possibilities frontier represents an efficient allocation of resources, meaning that all available resources are being used to produce goods in the most optimal way possible. Therefore, choice C is the correct answer. Choice A is not necessarily true, as people may not be maximizing utility at every point on the frontier. Choice B is also incorrect, as it is possible to increase production of either good by reallocating resources or improving technology. Choice D is partly true, but it is important to note that not all points on the production possibilities frontier are unattainable, only the ones outside of the frontier itself.