In one-input models, all technologically efficient production plans are economically efficient and vice versa.

Question

Quizplus · Accepted Answer

This statement is true. In one-input models, there is only one factor of production (usually labor) and its price remains constant. Therefore, any production plan that maximizes output using this factor is also the most economically efficient plan. Conversely, any economically efficient plan will also be technologically efficient because efficiency means achieving the maximum output with the given input.

In One-Input Models, All Technologically Efficient Production Plans Are Economically