Figure 19-3 illustrates the determination of an efficient output mix in a two good economy.The output combination is represented by point Z and the consumption point of a representative consumer is W.The slope of the line zz represents the marginal rate of transformation [MRT].
-Refer to Figure 19-3 and identify the correct statement.
A)If the distribution of output at Z is given by point W,each consumer has the same MRS.
B)The consumption point W is a suboptimal consumption point
C)Compared to consumers' tastes,too less of good Y is being produced.
D)Given the tastes of the consumers,the distribution of the output at point Z must be changed for attaining Pareto optimality.

Question

Figure 19-3 illustrates the determination of an efficient output mix in a two good economy.The output combination is represented by point Z and the consumption point of a representative consumer is W.The slope of the line zz represents the marginal rate of transformation [MRT]. 
-Refer to Figure 19-3 and identify the correct statement.
A)If the distribution of output at Z is given by point W,each consumer has the same MRS. 
B)The consumption point W is a suboptimal consumption point 
C)Compared to consumers' tastes,too less of good Y is being produced. 
D)Given the tastes of the consumers,the distribution of the output at point Z must be changed for attaining Pareto optimality.

Quizplus · Accepted Answer

The Answer of Figure 19-3 illustrates the determination of an efficient output mix in a two good economy.The output combination is represented by point Z and the consumption point of a representative consumer is W.The slope of the line zz represents the marginal rate of transformation [MRT]. 
-Refer to Figure 19-3 and identify the correct statement.
A)If the distribution of output at Z is given by point W,each consumer has the same MRS. 
B)The consumption point W is a suboptimal consumption point 
C)Compared to consumers' tastes,too less of good Y is being produced. 
D)Given the tastes of the consumers,the distribution of the output at point Z must be changed for attaining Pareto optimality.

Figure 19-3 Illustrates the Determination of an Efficient Output Mix