Figure 19-3 Illustrates the Determination of an Efficient Output Mix

Multiple Choice

Figure 19-3 illustrates the determination of an efficient output mix in a two good economy.The output combination is represented by point Z and the consumption point of a representative consumer is W.The slope of the line zz represents the marginal rate of transformation [MRT].
Refer to Figure 19-3.Suppose the marginal rate of substitution [MRS] at point W is 3Y/2X instead of 2Y/1X.Which of the following will be true?

A) The representative consumer's MRS will be less than the MRT,which implies more Y and less X will make all consumers better off.
B) The economy will be producing an efficient output combination.
C) The representative consumer's MRS 3Y/2X will be less than the MRT,which implies more X and less Y will make both consumers better off.
D) The allocation of the goods between the two individuals is efficient.