When production efficiency does NOT occur,
i.an economy is producing at a point within its PPF.
ii.there are unemployed resources.
iii.allocative efficiency cannot occur.
A) i only
B) i and ii
C) iii only
D) i and iii
E) i, ii, and iii

Question

Quizplus · Accepted Answer

When production efficiency does not occur, an economy is producing within its PPF, indicating unemployed resources, and allocative efficiency cannot occur because resources are not being used optimally.

When Production Efficiency Does NOT Occur