Question

In a competitive market, all of the choices along the production possibility frontier display ______________ efficiency, while the specific choice on the frontier that society picks is the one with _______________ efficiency.

Answer 1

1st blank Productive

2nd blank Allocative

Answer 2

The correct answer is A) Productive; Allocative.

The other options of the question were B) Allocative; Productive. C) Allocative; Allocative. D) Productive; Productive.

In a competitive market, all of the choices along the production possibility frontier display productive efficiency, while the specific choice on the frontier that society picks is the one with allocative efficiency.

A competitive market is the one in which there are many companies in the industry that are trying to attract consumers with similar products and services. These companies are competing to get the preference of the consumer and try to get their loyalty due to the quality offered in the product.