All points on the production possibility frontier are allocations:
A)for which MRS equals MRT.
B)for which consumption is maximized.
C)all factors of production are used efficiently
D)where efficiency in production is not attained.

Question

Quizplus · Accepted Answer

The production possibility frontier represents the combination of goods that can be produced with limited resources. Points on the frontier are considered efficient because all factors of production are used in the most effective way possible to produce the maximum amount of goods with the given resources. This means that there is no waste and no opportunity cost. Therefore, all points on the production possibility frontier are allocations where all factors of production are used efficiently.

All Points on the Production Possibility Frontier Are Allocations