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...
In order to spend more time with her children, a young mother decides to work less hours as her pay increases. What does her labor supply curve look like?
What will be an ideal response?
How is economics used as a policy tool?
What will be an ideal response?
Consider the following economic agents:
a. the government b. consumers c. producers Who, in a centrally planned economy, decides what goods and services will be produced with the scarce resources available in that economy? A) producers B) consumers C) the government, consumers, and producers D) consumers and producers E) the government
Using the Keynesian model, the effect of an increase in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the short run
A) a decrease; a decrease B) a decrease; no change C) an increase; an increase D) no change; a decrease