If an Economy Is Producing on Its PPF,then It Is

question 55

Multiple Choice

If an economy is producing on its PPF,then it is definitely achieving

• A) both production and allocative efficiency.
• B) only production efficiency, but it definitely is not achieving allocative efficiency.
• C) only allocative efficiency, but it is definitely not achieving production efficiency.
• D) neither production nor allocative efficiency.
• E) only production efficiency.

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Definitions:

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market.

Oligopoly

A market structure characterized by a small number of firms whose decisions about production and pricing significantly affect the market.

Herfindahl Index

A measure of market concentration that sums the squares of the market share percentages of all firms within the industry, used to assess the level of competition.

Oligopolistic

Pertains to a market structure characterized by a small number of firms dominating the market, leading to limited competition and significant control over market prices.