Attempts: Score:1 10. Efficiency in the production possibilities model Suppose S

Question

Attempts: Score:1 10. Efficiency in the production possibilities model Suppose South Africa produces only two goods: alfalfa and smartphones. The following graph shows South Africa's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labelled A to F. PPF ALFALFA (Milions of bushels) Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, feasible, or infeasible. Check all that apply Point Inefficient Efficient Feasible Infeasible Save & Continue without saving

Explanation / Answer

A and B are inefficient and feasible. A and B are inefficient because the resources are not used optimally. Production can be increased if resources are used fully.

F and E are efficient and feasible. These points lie on the PPF and indcates the optimum utilization of resources. One good cannot be increased without decreasing another good.

C and D are infeasible since they lie outside the curve.

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