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Given the current allocation of productive inputs, the marginal rate of transformation of food for clothing in a simple two-gYes/no for first click or select

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Answer #1

No

Produce less clothing and more food.

Efficiency is achieved when marginal rate of substitution is equal to marginal rate of transformation.

Because marginal rate of transformation is greater than marginal rate of substitution, one should produce more food so that marginal product of food decreases and less clothing so that marginal product of clothing increases, that decreases marginal rate of transformation to marginal rate of substitution.

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