If an economy is productively efficient ?
Correct answer: C. More of one product can only be produced if less of another product is produced
- A. Everyone is wealthy
- B. Resources are unemployed
- C. More of one product can only be produced if less of another product is produced
- D. The distribution of income is eqal
Explanation
Productive efficiency occurs on the production possibility frontier, where producing more of one good requires sacrificing some of another. It does not imply equal income distribution or that everyone is wealthy.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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