Which of the following indicates an efficient allocation of resources?

An efficient allocation of resources is represented by production on the production possibilities frontier (PPF). The PPF is a curve that illustrates the maximum feasible output combinations of two goods or services that can be produced within given resources and technology. When an economy operates on the PPF, it indicates that all resources are being utilized efficiently, meaning that it has maximized production given its resources.

Producing on the frontier signifies that there are no wasted resources; if the economy attempts to produce more of one good, it would have to produce less of another, reflecting trade-offs and opportunity costs. This condition shows that the economy is maximizing its potential output and using its resources to their fullest capability.

Options that suggest production below the PPF indicate inefficiency since resources are not fully utilized, meaning the economy could produce more output without requiring additional resources. Production above the PPF is unattainable with current resources and technology, indicating a point that cannot be reached in the current economic context. Lastly, while production at marginal cost relates to efficiency in terms of cost, it does not directly address the overall allocation of resources across the economy, making it less relevant to the concept of efficiency represented by the PPF.