An Allocation Satisfies the Output Efficiency Condition If

question 55

Multiple Choice

An allocation satisfies the output efficiency condition if:

• A) for every pair of goods, every input's marginal product equals the marginal rate of transformation.
• B) for every pair of goods, every consumer's marginal rate of substitution equals the marginal rate of transformation.
• C) only applies for firms that produce the same product.
• D) only applies for consumers that consume the same goods.