We can show economic efficiency: A. with points on the production possibilities frontier. B. with points inside and on the production possibilities frontier. C. with points outside the production possibilities frontier. D. with points inside the production possibilities frontier. E. with points on and outside the production possibilities frontier.
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Beyond the Answer
Points on the production possibilities frontier (PPF) represent economic efficiency because they indicate that resources are being utilized to their fullest potential, given current technologies and resources. In this scenario, producing more of one good would mean producing less of another, demonstrating the trade-offs that characterize efficient resource allocation. Points inside the PPF, on the other hand, showcase inefficiency, as more of one or both goods could be produced without sacrificing production of another good. Thus, the goal for any economy is to move towards the frontier, maximizing output and efficiency over time.