Which of the following statements best describes economic efficiency?
a. Economic efficiency occurs when all choices on the production possibilities frontier show productive efficiency because an increase the quantity of one good will also increase the quantity of another.
b. Economic efficiency occurs when no choices on the production possibilities frontier show productive efficiency because an increase the quantity of one good will also increase the quantity of another.
c. Economic efficiency occurs when all choices on the production possibilities frontier show productive efficiency because an increase the quantity of one good will decrease the quantity of another.
d. Economic efficiency occurs when no choices on the production possibilities frontier show productive efficiency because an increase the quantity of one good will decrease the quantity of another.
c. Economic efficiency occurs when all choices on the production possibilities frontier show productive efficiency because an increase the quantity of one good will decrease the quantity of another.
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In the above figure, when 2000 bicycles are produced each month, we can see that
A) the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. B) more bicycles should be produced to reach the allocatively efficient level of output. C) the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost. D) Both answers A and B are correct.
As gasoline prices increase, which of the following will happen?
a. Demand will increase. b. Supply will be reduced. c. Supply will increase. d. Demand will drop significantly.