When a producer is operating efficiently, it is producing:
A) at a point on its production possibilities frontier.
B) at a point on or below its production possibilities frontier.
C) only one good.
D) the good in which it has an absolute advantage.

Question

Quizplus · Accepted Answer

When a producer is operating efficiently, it is producing at a point on its production possibilities frontier. This means that the producer is using all of its available resources to produce goods in the most efficient manner possible, and is not wasting any resources. The production possibilities frontier represents the maximum amount of output that can be produced given the available resources and technology, and operating at a point on the frontier means that the producer is producing at its maximum potential.

When a Producer Is Operating Efficiently, It Is Producing