When Society Produces the Combination of Goods and Services on the PPF

question 200

Multiple Choice

When society produces the combination of goods and services on the PPF that it values the most highly,society has

• A) achieved only production efficiency and definitely not allocative efficiency.
• B) achieved only allocative efficiency definitely not production efficiency.
• C) achieved both production efficiency and allocative efficiency.
• D) achieved a free lunch.
• E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.

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Definitions:

APC

The Average Propensity to Consume denotes the percentage of income allocated towards consumption.

Disposable Income

Net disposable financial resources for households focusing on savings and spending post income tax adjustments.

Disposable Income

The budgetary provision for households for saving and spending after income taxes have been processed.

APS

Acute Psychological Stress, referring to the significant mental stress an individual experiences in response to a perceived threatening situation.