When an economy uses the most efficient means of farming to grow as much corn as possible, this economy has achieved:
A) production efficiency and allocative efficiency.
B) neither production efficiency nor allocative efficiency.
C) production efficiency but not necessarily allocative efficiency.
D) allocative efficiency but not necessarily production efficiency.

Question

Quizplus · Accepted Answer

Production efficiency is achieved when resources are used in a way that maximizes output, but allocative efficiency requires that resources are also distributed according to consumer preferences, which is not guaranteed by merely maximizing corn production.

When an Economy Uses the Most Efficient Means of Farming