2. Efficiency in the production possibilities model Suppose the Netherlands prod

Question

2. Efficiency in the production possibilities model Suppose the Netherlands produces only two goods: corn and tablets. The following graph shows the Netherlands's current production possibilities frontier, along with six output combinations represented by black points (plus symbols) labeled A to F. 100 PPF e 80 20 20 H) 100 CORN (Millions of bushels) Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check that apply. Point Inefficient Efficient Unattainable

Explanation / Answer

Inefficient: all the points inside the ppf are attainable but inefficient meaning resources are not fully utilized so points are C and D.

Efficient: all the points on the ppf are attainable and efficient meaning resources are fully utilized so points are A and B.

Unattainable: all the points which lie outside the Ppf are unattainable meaning beyond the range so points are E and F.

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