PPF - Increasing Marginal Opportunity Costs and Allocative Efficiency

2. Introductory Economic Models / PPF - Increasing Marginal Opportunity Costs and Allocative Efficiency / Problem 7

Problem 7

Allocative efficiency is achieved when:

The economy is producing on the PPF curve.

All resources are fully employed.

The opportunity cost is minimized.

Marginal benefit equals marginal cost.