When an economy produces at its allocatively efficient production point,
A) scarcity is not a problem.
B) a society can increase the production of all goods.
C) resources are not limited.
D) a society can increase the production of one good only by decreasing the production of some other good that is valued more highly.

Question

Quizplus · Accepted Answer

At the allocatively efficient production point, resources are already being used in the most efficient way possible to produce the goods and services that society desires. Any increase in the production of one good can only come at the expense of decreasing the production of some other good, since resources are limited. Therefore, the only way to increase the production of one good is by decreasing the production of another good that is valued more highly.

When an Economy Produces at Its Allocatively Efficient Production Point