1
answer
231
views
44
Problem

For access to Textbook Solutions, a Class+ or Grade+ subscription is required.

Textbook Expert
Textbook ExpertVerified Tutor
29 Oct 2021

Introduction

The production possibility curve shows a tradeoff between the two commodities as they have scarce resources. The production possibilities frontier also includes two kinds of efficiency which are the productive efficiency and Allocative efficiency. Productive efficiency determines how it would be impossible to produce more of one good which is unlikely lead to a repercussion effects on decreasing the quantity which can eventually produce more of the another good.

Allocative efficiency refers to a particular mix of goods which can be produced which also has a specific choice with respect to the production possibilities frontier. It reflects how the allocation of the society requires most desires.

Unlock all Textbook Solutions

Already have an account? Log in
Start filling in the gaps now
Log in