Practice prompt · Q:economics-and-market-foundations/evaluate-allocative-efficiency-001

Evaluate an output mix under a stated criterion

Check whether the learner keeps productive boundary classification separate from allocative choice under an explicit service criterion.

Updated Aug 7, 2026 Review due Nov 7, 2026

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Two plans lie on the same production frontier: 8 reconciliations and 2 forecasts, or 4 reconciliations and 4 forecasts. The authorized manager's documented criterion requires at least four forecast packages before assigning remaining capacity. Which conclusion is warranted?

Choose the best answer. a Select 4 reconciliations and 4 forecasts: both points are productively efficient, but only that point satisfies the authorized four-forecast criterion among the supplied alternatives. b Select 8 reconciliations and 2 forecasts because a productively efficient point is automatically allocatively efficient. c Neither point can be evaluated unless it maximizes profit, even though no profit objective was stated.

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Answer: a

Choice a. Under the stated service requirement and supplied alternatives, the 4-and-4 point is allocatively preferred. The conclusion changes if the criterion, feasible set, or evidence changes.