Consumers consume two goods, pancakes and cereal. If society is at a bundle whos
ID: 1207506 • Letter: C
Question
Consumers consume two goods, pancakes and cereal. If society is at a bundle whose marginal rate of transformation (MRT) is greater than the marginal rate of substitution (MRS):
the allocation is output-efficient.
efficiency can be improved by producing more pancakes and less cereal.
efficiency can be improved by producing fewer pancakes and more cereal.
the bundle is not on the production possibilities frontier
the allocation is output-efficient.
efficiency can be improved by producing more pancakes and less cereal.
efficiency can be improved by producing fewer pancakes and more cereal.
the bundle is not on the production possibilities frontier
Explanation / Answer
Ans:- efficiency can be improved by producing fewer pancakes and more cereal.
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