In an economy, there are two goods, x and y, which are produced by capital and labour. One unit of labour can produce either 2 units of x or 1 unit of y (or any linear combination of them).

One unit of capital can produce either 1 unit of x or 2 units of y (or any linear combination of them). There are 100 units of capital and 100 units of labour.

When the economy is producing 70 units of x there is bound to be unemployment and thus, inefficiency