To realize "full production" a society must achieve:

Question

Quizplus · Accepted Answer

To achieve "full production," a society must achieve both allocative and productive efficiency. Allocative efficiency means that resources are allocated in the most efficient way possible to produce the combination of goods and services that best satisfies consumers' preferences, while productive efficiency means that resources are being used in the most efficient way possible. Therefore, both of these efficiencies must be achieved to fully realize production. Income inequality (A) is not necessarily a requirement for full production, and neither is producing any output lying inside of its production possibilities curve (D), as a society could be producing inefficiently within its production possibilities curve. Productive efficiency alone (B) also does not guarantee full production if resources are not being allocated efficiently.

To Realize "Full Production" a Society Must Achieve