How is the most-valued or optimal point on the production possibilities curve determined?
Please provide the best answer for the statement.
Full employment and productive efficiency allows a society to achieve any point on the production possibilities curve. What point on the curve, however, is optimal? Answering this question focuses on the attainment of vocative efficiency. Any economic activity should be increased so long as the marginal benefit exceeds the marginal cost. Conversely, any economic activity should be decreased so long as the marginal cost exceeds the marginal benefits. Resources are efficiently allocated to an economic activity when the marginal cost equals the marginal benefit.
You might also like to view...
Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that
A) both bear an opportunity cost since they could have done other things instead of see the movie. B) both bear the same opportunity cost since they are doing the same thing. C) the cost of going to the movie is greater for the one who had more choices to do other things. D) neither bears an opportunity cost because the tickets were free.
The rule of rational choice suggests that you will engage in more of an activity if: a. the total benefit from that activity exceeds the total cost of the activity
b. the total cost from that activity exceeds the total benefit of the activity. c. the additional cost incurred as a result of the activity exceeds the additional benefit received. d. the additional benefit received as a result of the activity exceeds the additional cost incurred.