An Edgeworth production box:
A)identifies the most efficient method of producing the output.
B)identifies the maximum amount of an input required to produce a good.
C)identifies all the ways in which two inputs can be allocated between two industries in a simple economy.
D)identifies the different ways in which two goods can be allocated between two people in a simple economy.

Question

Quizplus · Accepted Answer

The Edgeworth production box is a graphical representation that identifies all the ways in which two inputs can be allocated between two industries in a simple economy. It helps in analyzing the production possibilities of an economy given the resources available to it. Therefore, option C is the correct answer. Option A is incorrect because the Edgeworth production box is not used to identify the most efficient production method. Option B is incorrect because it does not identify the maximum amount of an input required to produce a good. Option D is also incorrect because it does not relate to the production possibilities of an economy.

An Edgeworth Production Box