Question

any point inside the ppf is considered inefficient because we can move to the PPf "blank". that is there no trade off associatedwith moving to the ppf

Answer 1

PPF is the curve that shows the best (maximum) combinations of two outputs that an economy can produce given three assumptions: 1) Technology is fixed; 2) Resources are fixed; and 3) Resources are used at their fullest.

Hence, all points in PPF are efficient and a movement between one efficient point to another, means that more of one product is produced only if less of the other is produced. This creates a trade-off due to scarcity of resources.

All points inside PPF are inefficient points. These points are attainable (e.g., point U), but they are not using the resources at the fullest. At point U, if technology or resources are used at full capacity, the economy could be at point B or C, meaning more would be produced.