Question

Consider the graph of the production possibility frontier for country Z below. A combination of clothing and cell phones that would meet the productive efficiency would be:

G

F

E Production Possibility Frontier - Country Z 9 A 15,7 10,6 15,4 41 10,4 18, 2 漉 20,0 20 15 25 Clothing - Daily production

Answer 1

Answer

The correct answer is point E

Productive Efficiency consist of all those combination in which more of any good cannot be produced without sacrificing some other good.

Point F - Points on PPF consist of amount of goods an economy produce if it uses all its resources significantly. Hence Economy can Produce at Point B. This means Economy can Produce more of call phones than Point F and same level of Clothing.

Hence Point F would not meet the productive efficiency.

Point G - Points outside PPF is not attainable. Hence Economy cannot produce at point G. Hence Point G would not meet the productive efficiency.

Point E - Points on PPF consist of amount of goods an economy produce if it uses all its resources significantly. Hence If we want to produce more cell phones than Point E we have to sacrifice Clothing. This implies Point E would meet the productive efficiency.

Note - All points on Production Possibility Frontier (PPF) would meet the Productive efficiency.

Hence, the correct answer is Point E