Figure 19-3 Illustrates the Determination of an Efficient Output Mix

question 40

Multiple Choice

Figure 19-3 illustrates the determination of an efficient output mix in a two good economy.The output combination is represented by point Z and the consumption point of a representative consumer is W.The slope of the line zz represents the marginal rate of transformation [MRT].
-Refer to Figure 19-3 and identify the correct statement.

• A)If the distribution of output at Z is given by point W,each consumer has the same MRS.
• B)The consumption point W is a suboptimal consumption point
• C)Compared to consumers' tastes,too less of good Y is being produced.
• D)Given the tastes of the consumers,the distribution of the output at point Z must be changed for attaining Pareto optimality.