Practice prompt · Q:economics-and-market-foundations/diagnose-productive-efficiency-001

Diagnose an interior production point

Check whether the learner distinguishes feasible unused modeled capacity from both an efficient frontier point and an unattainable point.

Updated Aug 7, 2026 Review due Nov 7, 2026

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Rowan's modeled frontier has intercepts of 12 reconciliations and 6 forecasts. A plan calls for 4 reconciliations and 2 forecasts. What does the production model establish about that point?

Choose the best answer. a The point is feasible but productively inefficient: utilization is 4/12 + 2/6 = 2/3, so the model indicates unused productive capacity. b The point is unattainable because Rowan is not producing either output at its maximum. c The point is allocatively inefficient for every purpose because it is productively inefficient.

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Answer: a

Choice a. The utilization ratio is 2/3, so the point is feasible and interior. Investigate why capacity appears unused before attributing waste, intent, or a remedy.