Production Is Efficient If the Economy Is Producing at a Point

question 235

Multiple Choice

Production is efficient if the economy is producing at a point

• A)on the production possibilities frontier.
• B)outside the production possibilities frontier.
• C)on or inside the production possibilities frontier.
• D)inside the production possibilities frontier.

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Definitions:

Law Of Comparative Advantage

A principle in international trade that states countries should specialize in producing goods for which they have a lower opportunity cost than their trading partners.

Foundation

An organization established to support charitable activities, educational goals, or other purposes that contribute to the public good.

Free Trade

International exchange of goods permitted to operate freely, devoid of tariffs, quotas, or any form of restraint.

Low-Opportunity Cost Producer

A producer who can produce a good or service at a lower opportunity cost than competitors, enabling more efficient production and allocation of resources.