If society can produce more of one good but must forgo some of another good to do so,it is definitely achieving
A) both production and allocative efficiency.
B) only production efficiency.
C) only allocative efficiency.
D) neither production nor allocative efficiency.
E) None of the above answers is correct because when society must forgo another good to produce more of one good, then society might be production efficient or it might be allocatively efficient.

Question

Quizplus · Accepted Answer

If society can produce more of one good but must forgo some of another good to do so, then it is achieving production efficiency because it is able to produce more of one good with the given resources. Allocative efficiency refers to producing the optimal combination of goods, which may not necessarily be achieved in this scenario as society must give up some of another good to produce more of a different good. Answer options A, C, and D are incorrect because the given scenario does not necessarily indicate both production and allocative efficiency, only production efficiency or neither efficiency.

If Society Can Produce More of One Good but Must