What is allocative efficiency and how does it relate to the production possibilities frontier?
What will be an ideal response?
Production efficiency occurs when production takes place at a point on the PPF. This indicates that all available resources are being used for production and society cannot produce additional units of one good or service without reducing the output of another good or service. Allocative efficiency, however, requires that the goods and services produced are those that provide the greatest possible benefit. This definition means that the allocative efficient level of output is the point on the PPF (and hence is a production efficient point) for which the marginal benefit equals the marginal cost.
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A. supply. B. both supply and demand. C. government regulations. D. demand.
The industrial revolution first began in _________.
Fill in the blank(s) with the appropriate word(s).