The necessary conditions for an efficient outcome in a general equilibrium model with productions include:
A)efficiency in consumption and production.
B)efficiency of the production mix.
C)efficiency of the product mix, together with efficiency in consumption and production.
D)efficiency in production.

Question

Quizplus · Accepted Answer

In a general equilibrium model with productions, an efficient outcome requires both efficiency in consumption and production, as well as efficiency of the product mix. This means that the production mix must be efficient in terms of producing the right combination of goods, and the product mix must be efficient in terms of satisfying consumer preferences. Therefore, option C, which includes both efficiency in consumption and production as well as efficiency in the product mix, is the best choice. Option A only includes efficiency in consumption and production, while option B only includes efficiency of the production mix, and option D only includes efficiency in production, none of which fully captures the necessary conditions for an efficient outcome in this context.

The Necessary Conditions for an Efficient Outcome in a General