Answer to Question 1
Competitive markets ensure that households don't end up with the wrong goods and services. A household will buy a good as its willingness to pay for it is greater than (or equal to) its price. Therefore, as long as households are free to choose how to spend their incomes, they cannot end up with the wrong combinations of goods.
Answer to Question 2
Production efficiency occurs when goods and services are produced at the lowest cost. This definition means that production efficiency occurs at any point on the PPF. Therefore all of the production points on the PPF are production efficient. Allocative efficiency occurs when goods and services are produced at the lowest cost and in the quantities that provide the greatest possible benefit. The allocatively efficient production point is the single point on the PPF that has the greatest possible benefit.
A cross of sweet peas showing that independent assortment does not always occur
World map of the distribution of skin color.
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The Frequency Distribution Curve of a Drug
Distribution of dystrophin in muscle cells. (a) In normal muscle cells, all the dystrophin is locate
The threshold model explains the discontinuous distribution of some multifactorial traits. In this m