If production in the economy is efficient,then changes in market prices

Question

Quizplus · Accepted Answer

If production in the economy is efficient, it means that the economy is producing goods and services at its maximum potential, which is represented by the production possibilities curve. Any changes in market prices will affect the allocation of resources between different goods and services, leading to a change in output. As a result, we will move along the perimeter of the production possibilities curve, as we can produce more of one good only by producing less of another. Therefore, the best choice is A.

If Production in the Economy Is Efficient,then Changes in Market