Question

A combination of clothing and cell phones that would meet the allocative efficiency would be: Group of answer choices any combination on the production possibilities frontier that brings the highest level of satisfaction to the people in the economy. combination G because it represents the combination with the highest number of cell phones and clothing. Combination A because cell phones are more valuable than clothing. combinations B or C because they represent a balanced quantity of cell phones and clothing.

Answer 1

Answer: Any combination on the production possibilities frontier that brings the highest level of satisfaction to the people in the economy.

Explanation:

The Production Possibilities Frontier depicts the quantities of two goods that can be produced given that resources are limited and being used to produce the same goods.

Allocative efficiency therefore is any point on this frontier that brings the highest level of satisfaction to the people based on their needs and wants. For instance if people want more clothing than cell phones they should pick any points from B to E.

So long as it is on the PPF, there is Allocative efficiency.