Test: AP Macroeconomics

Use the following diagram to answer the questions below:

Ppf efficiency

5.

If the lower diagram represents the marginal costs and marginal benefits of the consumer good to society, which of the following answers correctly represents the characteristics of the points on the production possibilities frontier?

Point is neither productively efficient nor allocatively efficient

Point  is an allocatively inefficient point but productively efficient point of production

Point  is allocatively efficient but productively inefficient

Point  is a point of allocative efficiency and productive efficiency

Point  is a productively efficient point but allocatively inefficient point

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