Figure 3.3 illustrates the distinction between efficient and inefficient production. With inefficient production, the economy might be producing 3 million smartphones and 5 million bikes at point H. With an efficient use of the economy’s resources, it is possible to produce at a point on the PPF such as point D or E. At point D, there are more bikes and the same quantity of smartphones as at point H. And at point E, there are more smartphones and the same quantity of bikes as at point H. At points D and E, production is efficient.

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