"If an economy is producing at a point on its PPF, it has achieved allocative efficiency." True or false? Explain
What will be an ideal response?
If an economy is producing at a point on its PPF, it has achieved production efficiency, but not necessarily allocative efficiency. We have achieved allocative efficiency if we are producing at the point on the PPF that we prefer to all other points because at this point we cannot produce more of any good without giving up some other good that we value more highly.
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Workers displaced because of trade:
a. have had larger losses in manufacturing compared with services. b. have had larger losses among older workers than younger workers. c. are likely to find replacement jobs within 3 years. d. have experienced all of these answer choices.
Most t-shirts bought by Americans are made in Asia. Producers in Asia making t-shirts trade with America because they
A) cannot produce enough t-shirts for their own domestic consumption. B) receive a higher price than they would receive from another buyer. C) cannot lower their price any lower and still make a profit. D) must export something to the United States. E) receive a lower price than they would receive from another buyer.