A point on the production possibility frontier and the contract curve in the Edgeworth production box both reflect:
A)identical marginal rates of substitution among consumers.
B)full employment of resources.
C)the efficient output mix.
D)the ratio of the input prices.

Question

Quizplus · Accepted Answer

Both the production possibility frontier and the contract curve in the Edgeworth box indicate full employment of resources, as they represent efficient allocations where no resources are wasted.

A Point on the Production Possibility Frontier and the Contract