Chapter 3: Production Possibility Curves

Question 1

Allocatively efficient

Answer 1

Allocative efficiency occurs when social welfare is maximized. The distribution of resources is such that it is not possible to redistribute them without making someone worse off.

Question 2

Consumer goods

Answer 2

goods and services used by people to satisfy their needs and wants

Question 3

Capital goods

Answer 3

goods that are used in the production of other goods