Reasons such as land, capital and labour might not be equally suited to producing both goods
Types of economic efficiency
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Pareto efficiency - resources cannot be allocated to make someone better off, w/o making someone else worse off
Productive efficiency - when an economy is producing goods and services at the lowest possible cost, given technology and resources (on the curve)
Allocative efficiency - when an economy is producing a mix of goods and services that best align with consumer preferences and social needs (on the curve)
Dynamic efficiency - refers to and economy's ability to grow and expand its production possibilities over time (economic growth)
Importance of Capital Goods and Consumer Goods
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Capital goods are essential for long-term economic growth and development
Consumer goods do not continue directly to future growth
