Question

Use a production possibilities frontier to describe the idea of Efficiency and Inefficiency.

Answer 1

Answer:

According to the PPF, points A, B, and C on the PPF curve represent the most efficient use of resources by the economy. ... Point X represents an inefficient use of resources, while point Y represents a goal that the economy simply cannot attain with its present levels of resources.

Answer 2

1. Production possibility frontier shows production possibilities of quantities of two goods that can be produced with same resources.
2. In the given figure there are three point A,B,C.
3. Inefficiency point - A point lies below the production possibility curve. A or any other point below the curve shows inefficient production i.e. resources are not being fully utilised.
4. Efficiency point - B lies on production posibility curve. B or any other point on the curve shows feasible production point.  On the curve the production of one good can be increased by reducing production of second good.
5. C lies beyond the production possibility curve. C or any other point beyond the curve are unattainable.