3. Efficiency in the production possibilities model Suppose South Africa produce

Question

3. Efficiency in the production possibilities model

Suppose South Africa produces only two goods: barley and laptops. The following graph shows South Africa's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F.

Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply.

3. Efficiency in the production possibilities model Suppose South Africa produces only two goods: barley and laptops. The following graph shows South Africa's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F 100 80 PPF 40 30, 15 D C 40 BARLEY (Millions of bushels)

Explanation / Answer

Points which are outside of PPF are unattainable because of the scarce resource.

Points which are inside of the PPF are inefficient as available resources are not fully used.

Points which are on the PPF are efficient as available resources are fully used

A- Unattainable

B- Unattainable

C- Inefficient

D- Inefficient

E- Efficient

F- Efficient

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