Question

If a country is operating on the production possibilities frontier curve, it must mean that which of the following is true?

A The country is allocatively and technically efficient

B The country is technically efficient.

C The country is economically efficient

D The country is allocatively efficient by not necessarily technically efficient

Answer 1

There are two concepts technological efficiency and economic efficiency

Technology efficiency cannot be reached until input can be increased but economic efficiency can be reached with the minimum input

A production possibility curve is a representation of two type of goods in any economy over the given period of time in various combination

Allocative efficiency means fulfilling the desires what the society actually wants

If any country is producing at production production possibility curve it means the country is allocatively efficient but it not always true that the country is technically efficient as well because the main concept of economic always lies behind the scarcity

As resources are limited so we need minimum input with maximum output and benifit to the society

Hence the correct answer is option D

Good A (PPF) economic efficient point Good B