Why is a point below the production possibilities curve less ...

[schs14]

Why is a point below the production possibilities curve less efficient than a point on that curve?
 
  What will be an ideal response?

Question 2

Of the following nations, the country with the highest saving rate is
 
  A) the United States.
  B) Japan.
  C) Mexico.
  D) Ethiopia.

[BUTTHOL369]

Answer to Question 1

A point on the production possibilities curve is efficient because it means the economy is producing the maximum outputs of goods and services with given resources and technology. By contrast, a point below the production possibility curve means that the use of the given resources is not generating the maximum possible outputs of goods and services. Thus, this point represents an inefficient combination of outputs produced with available resources and technology.

Answer to Question 2

B