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:

Cost Analysis

The process of evaluating the costs involved in producing a product or providing a service, to determine ways to reduce or manage expenditures.

R-squared

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.

Dependent Variable

A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX.

Independent Variable

A variable in an experiment that is manipulated to observe its effect on the dependent variable.