Why it is considered to be good to try and manage inside the fixed boundaries of production possibility frontier?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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A country has no choice but to try to manage inside the fixed boundaries of a production possibilities curve.  It will try to move the boundaries of that curve, but while the curve is fixed, a country must manage inside of it.

The reason for this is that the curve of this type of graph shows the combination of kinds of goods that a country is capable of producing.  It is not possible to go outside that boundary.  A country must try, instead, to make sure that it is producing at a point on the boundary because such a point is one where the country is producing as efficiently as possible.

So countries have no choice.  They must manage inside (or on) the fixed boundaries of the production possibility frontier.

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