Consider an economy with fixed amount of resources and given technological state. It produces only 2 goods – Good A and Good B. Different combinations showing maximum outputs of two goods which can be produced (when given resources and technology are used fully) are plotted on a graph. When all the plotted points are joined, following graph was obtained.

Based on the above graph, answer the following questions.

What does point A represent?

Efficient utilization of resources

The correct answer is Option 3: Efficient utilization of resources

A point on the Production Possibility Curve (PPC) represents a specific combination of two goods that an economy can produce efficiently given its available resources and technology. If the economy is operating at a point ON the Production Posibility Curve, then it means it is producing a combination of two goods making full and efficient utilization of resources of the economy. Since Point A lies on the curve, it means" Efficient utilization of resources".