Answer:
The correct answer is option A.
Explanation:
A production possibilities curve shows the maximum possible bundles of two goods, that an economy or firm can produce using its given resources and level of technology.
A point on the production possibility curve is both productively as well as allocative efficient.
A point below the frontier is allocatively efficient and attainable but productively inefficient.
A point above the frontier is unattainable at the current level of resources and state of technology.
Answer:
When production is insufficient, the firm can produce more cat food without producing less dog food.
Explanation:
Felicia's Fine Foods achieves production efficiency when it cannot produce more dog food without producing less cat food, or it cannot produce more cat food without producing less dog food.
When production is efficient, Felicia's Fine Foods is producing on its PPF. Along the PPF, the firm cannot produce more of one good without producing less of another good.
Points below the PPF are inefficient because at those points the firm can produce more of one good without producing less of the another good.
Production efficiency occurs when Felicia's Fine Foods is getting all that it can from its resources and cannot produce more of one good without producing less of something else.
When production occurs on the PPF, resources are used efficiently.
When production occurs at a point inside the PPF, resources are used inefficiently.
