Question

A country produces two goods: education and weapons of war. It is on its production possibilities frontier. It would like fewer resourses spent on weapons of war and more spent on education. Implementing this preference represents an improvement in _________.a. opportunity costsb. productive efficiencyc. allocative efficiencyd. diminishing marginal returns

Answer 1

Answer:

c. allocative efficiency.

Explanation:

Allowing the expenditure of fewer resources on weapons of war and more resources on education represents an improvement in allocative efficiency. Meeting this preference is an example of allocative efficiency. This happens when the desires of the society are met achieving an optimal distribution of goods.