If a given production combination is efficient, then it must be:
A. below the production possibilities curve.
B. on the production possibilities curve.
C. above the production possibilities curve.
D. either an attainable or unattainable point.
Answer: B
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Jack swapped his basketball for Jim's glove. Even if national income accountants were aware of this trade, they wouldn't include it in their GDP measure because
A) it was an unproductive exchange. B) the basketball and glove were not final goods. C) this was not a market transaction. D) it failed to increase the wealth of both traders. E) there is no satisfactory way to determine market values for bartered goods, new or used.
Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have data for price (P), MR, ATC, MC, AVC, at the quantity of 1,000 breads a day. Among the other relationships you consider is (P – ATC) which measures the firm's
a. total profit b. profit per unit of output c. marginal profit d. total revenue e. average variable cost