The diagram below shows the production possibility frontier (PPF) for an economy producing Capital Goods and Consumer Goods, with points PPP, QQQ, and R R\,R representing different production states.
Which of the following statements is correct?
Point QQQ is both productively and allocatively efficient because it lies on the frontier, while Point RRR can be reached by a reallocation of existing resources.
A movement from Point PPP to Point QQQ represents long-run economic growth, whereas Point RRR represents a productively efficient but currently unattainable combination of goods.
Point PPP represents a productively inefficient state where resources are underutilized, but it is impossible to determine whether Point QQQ is allocatively efficient from the PPF alone.
Point QQQ is allocatively efficient because it lies on the frontier, but Point PPP is productively efficient because it lies within the boundary.
