Efficiency is illustrated by
A)both the production possibilities frontier and the circular-flow diagram.
B)neither the production possibilities frontier nor the circular-flow diagram.
C)the production possibilities frontier only.
D)the circular-flow diagram only.

Question

Quizplus · Accepted Answer

The production possibilities frontier illustrates efficiency by showing the maximum amount of output that can be produced with given resources and technology. It demonstrates the tradeoffs that must be made between producing different goods or services, and therefore highlights the concept of efficiency. The circular-flow diagram, on the other hand, illustrates the flow of goods and services in the economy, but does not directly show efficiency.

Efficiency Is Illustrated by