trees. This answer illustrates why productive efficiency is beneficial. Compared with choices inside

the PPF, it means more of one or both goods.

e.

In the choice between T and S, it is not possible to say which choice is better. True, S is on the PPF and

T is not—but that only addresses the issue of productive efficiency. If a society has a strong preference

for economic output and places a lower value on trees, then allocative efficiency may lead to a choice

of T over S. Of course, the reverse could also be true, leading to a choice of S. Without information on

society’s preferences to judge allocative efficiency, this question cannot be answered.

f. Compared with command-and-control policies, market-oriented policies allow either more output

with the same environmental protection or more environmental protection with the same level of

output—or more of both environmental protection and output. Thus, a choice like Q inside the PPF is
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