If the production of 2,000 cars and 500 tons of corn during a year is economically efficient for a country which produces only these two products, which of the following conclusions can be drawn?
A)It satisfies domestic demand completely.
B)The production of cars can not be increased without reducing the production of corn.
C)The reallocation of resources to change the production level must reduce production of both goods.
D)It is possible to increase the production of both if resources can be reallocated.

Question

Quizplus · Accepted Answer

Economic efficiency implies that resources are allocated in a way that maximizes the production of goods. If the production is economically efficient, producing more of one good (cars) would require reallocating resources away from the other (corn), thus reducing its production.

If the Production of 2,000 Cars and 500 Tons of Corn