Micro-Econ Ch.2 Points on the PPF & Types of Efficiency (Scenarios)

Points Directly On the PPF (e.g., Points A, B, C, D in Uniland)

Productively efficient combinations where all resources are fully and efficiently utilized given current technology.

Points Outside the PPF (e.g., Point H in Uniland)

Unattainable output combinations because the economy lacks sufficient resources, adequate technology, or both.

Points Inside the PPF (e.g., Point K in Uniland)

Feasible but inefficient combinations where resources are underutilized, unemployed, or wasted.

Scenario: Operating Inside the PPF (Point K: 400 cars, 1200 computers)

The economy can increase production of cars, computers, or both without requiring additional resources or technology improvements.

Scenario: Producing a Point on the PPF That Society Dislikes

The economy is productively efficient (all resources fully used) but socially inefficient because it produced the wrong combination of goods.