The point on the production possibilities curve that is most desirable can be found by:
A. estimating the marginal costs of both products in real or physical terms.
B. comparing marginal benefits and marginal costs.
C. determining where least-cost production occurs.
D. calculating where economic growth will be greatest.
Answer: B
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In the above figure, which movement illustrates the impact of a falling price level and a constant money wage rate?
A) E to I B) E to F C) E to J D) E to H
Which of the following does NOT represent a way in which financial intermediaries take advantage of economies of scale?
A) paying lower brokerage fees per dollar invested B) paying lower legal fees per dollar invested C) purchasing sophisticated computer systems D) paying lower taxes per dollar invested
In the short run, if current output remains persistently above potential ________
A) inflation will rise causing a movement along the aggregate supply curve B) expected inflation will rise causing an upward shift of the aggregate supply curve C) the aggregate supply curve will shift until current output returns to its potential level D) all of the above E) none of the above
The long-run exit rule is to exit the industry if:
A. P > AVC. B. P < AVC. C. P < ATC. D. P > ATC.