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production possibilities curve

1. When all people use economic reasoning, inefficiency is impossible, because if the benefit of reducing that inefficiency were greater than the cost, the inefficiency would be eliminated. Thus, if people use economic reasoning, it's impossible to be on the interior of a production possibility curve. Is this statement true or false? Why?

2. How does the democratic political system lead politicians to emphasize points outside the production possibility curve?

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1. When all people use economic reasoning, inefficiency is impossible, because if the benefit of reducing that inefficiency were greater than the cost, the inefficiency would be eliminated. Thus, if people use economic reasoning, it's impossible to be on the interior of a production possibility curve. Is this statement true or false? Why?
This statement is false. The reason is that "people" is not one reasoning person who can evaluate the cost and the benefit of eliminating inefficiency. 'People' is composed of several individuals, each one of whom has separate and often conflicting economic objectives. These objectives are often different from the overall objectives of the " people". Thus the inefficiencies creep in. Consider the classic example of wheat output curtailment. It is to the overall farmers benefit to curtail the total production of wheat, so that the prices are maintained at profitable levels for all farmers, however, from the ...

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This posting explains the production possibilities curve.

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