The figure above shows a nation's production possibilities frontier. If the marginal cost equals the marginal benefit at point A when 4 million pizzas are produced,
A) allocative efficiency is achieved but production efficiency is not achieved because there are no tacos being produced.
B) both allocative and production efficiency are achieved.
C) production efficiency is achieved but allocative efficiency is not achieved because there are no tacos being produced.
D) production efficiency is achieved but allocative efficiency is not achieved because the number of tacos produced is at its absolute maximum.
E) neither allocative nor production efficiency has been achieved.
B
You might also like to view...
Currency rates of exchange are determined by
A) agreements among governments. B) the nations with the strongest armies. C) the demand and supply of the currency. D) multilateral business agreements.
The supply of labor is the relationship between __________
A. the quantity of labor supplied and leisure time forgone B. the real wage rate and the quantity of labor supplied C. firms' willingness to supply jobs and the real wage rate D. the labor force participation rate and the real wage rate