An economy is being efficient if it is impossible to produce more of one good without producing less of another.

Question

Quizplus · Accepted Answer

This statement defines the concept of production possibility frontier, where an economy operates at its maximum capacity and allocates resources to achieve the highest possible production of two goods given a certain level of technology and resources. Any movement towards producing more of one good entails sacrificing some quantity of the other good, thus indicating the limits of the economy's resources and technology. This is the essence of efficiency in economic terms.

An Economy Is Being Efficient If It Is Impossible to Produce