Topic summary
Production possibilities frontier
Extracted from the Wikipedia article Production–possibility frontier.
Efficiency
- Points that lie either on or below the production possibilities frontier/curve are possible/attainable: the quantities can be produced with currently available resources and technology.
- Points that lie above the production possibilities frontier/curve are not possible/unattainable because the quantities cannot be produced using currently available resources and technology.
- Points that lie strictly below the frontier/curve are inefficient, because the economy can produce more of at least one good without sacrificing the production of any other good, with existing resources and technology.
- Points that lie on the frontier/curve are efficient.